An increase in the price of capital will reduce the demand for labor if capital and labor are complementary resources.

Name: An increase in the price of capital will reduce the demand for labor if capital and labor are complementary resources.
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Question

Quizplus · Accepted Answer

If capital and labor are complementary, an increase in the price of capital makes it more expensive to use both resources together, potentially reducing the demand for labor as firms may cut back on production or seek alternatives.

An Increase in the Price of Capital Will Reduce the Demand