Robotic technology is a substitute for labor in many manufacturing processes.If the price of robotic technology decreases and the scale of the firm's production does not change,there is
A) a decrease in the demand for labor.
B) an increase in the demand for labor.
C) no change in the demand for labor.
D) an increase in the supply of labor.
E) a decrease in the supply of labor.

Question

Quizplus · Accepted Answer

If the price of robotic technology decreases, firms will be more likely to substitute labor for robots. This will lead to a decrease in the demand for labor as fewer workers are needed to produce the same amount of output. The scale of production does not change, so there will be no need for additional labor.

Robotic Technology Is a Substitute for Labor in Many Manufacturing