A Firm Has to Decide on the Kind of Technology

question 86

Essay

A firm has to decide on the kind of technology it wants to invest in.It has two options: Technology A,which is labor-saving,and Technology B,which is labor-complementary.Illustrate graphically how the equilibrium wage and employment level in the firm will change if it decides to invest in the following.
a) Technology A
b) Technology B

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Definitions:

Initial Public Offering (IPO)

The first sale of a company's stock to the public, transitioning the company from private to public to raise equity capital.

Rights Offering

A financial mechanism allowing current shareholders to purchase additional shares directly from the company at a specified price before the shares are offered to the public.

Underwriting Provision

A clause or condition included in financial agreements, often in insurance or security underwriting, detailing specific obligations or requirements.

Debt Offerings

The issuance of bonds or other borrowing instruments by entities to raise capital.