Multiple Choice
Suppose capital and labor are perfect substitutes for a particular production process. If the price of labor increases, holding the price of capital and the level of output constant, the firm may:
A) use more capital and less labor.
B) use more labor and less capital.
C) use the same amounts of capital and labor.
D) Either use more capital and less labor or use the same amounts of both inputs.
Correct Answer:
Verified
Correct Answer:
Verified
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