Multiple Choice
If two inputs are substitutes in production,and an increase in the price of one input shifts the demand curve for the other input to the left,then
A) the scale effect is greater than the substitution effect, and the two are gross complements.
B) the scale effect is less than the substitution effect, and the two are gross complements.
C) the scale effect is greater than the substitution effect, and the two are gross substitutes.
D) the scale effect is less than the substitution effect, and the two are gross substitutes.
Correct Answer:
Verified
Correct Answer:
Verified
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