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Rybczynski theorem states that If you hold output prices constant as the amount of a factor of production increases, then the supply of the good
Rybczynski theorem states that If you hold output prices constant as the amount of a factor of production increases, then the supply of the good that uses this factor intensively increases and the supply of the other good decreases.
Assuming that good "X" is the capital intensive good and good "Y" is the labor intensive good, use the identity below to show intuitively why an increase in K relative to L will result in an increase in the supply of good "X" and a decrease in the supply of good "Y."
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