Consider a firm's demand curve for labour.If a technological change makes it harder to substitute capital for labour,the demand curve for labour
A)shifts parallel to the left.
B)becomes less elastic.
C)becomes more elastic.
D)shifts parallel to the right.
E)is not affected.

Question

Quizplus · Accepted Answer

If a technological change makes it harder to substitute capital for labour, it means that the firm will require more labour and will have less of a choice to substitute it with capital. Therefore, the demand for labour becomes less elastic, as the firm cannot easily adjust its demand in response to changes in the wage rate.

Consider a Firm's Demand Curve for Labour