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In a recession, there are many unemployed workers. Employers find that when the price of labor is $9.00, the quantity supplied is 200 workers. When
In a recession, there are many unemployed workers. Employers find that when the price of labor is $9.00, the quantity supplied is 200 workers. When they lower the wage to $8.50, 175 workers are willing to work. a. Calculate the price elasticity of supply for workers. b. Over time, technology becomes more effective as a substitute for workers. What happens to the firm's demand for workers? Explain.
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