Multiple Choice
Consider a firm that uses labor and capital as the only inputs.Suppose labor is on the horizontal axis and capital is on the vertical axis.Further,the expansion path has shifted down and average cost curves have shifted up.Which of following provides the most likely explanation for what has happened?
A) The wage rate decreased
B) The wage rate increased
C) The price of capital decreased
D) The price of capital increased
Correct Answer:
Verified
Correct Answer:
Verified
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