A High Elasticity of Substitution Between Capital and Labor Implies

question 40

Multiple Choice

A high elasticity of substitution between capital and labor implies that labor demand will be:

• A)price elastic.
• B)unitary price elastic.
• C)price inelastic.
• D)more inelastic than capital demand.

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Definitions:

Manufacturing Industry

The sector of the economy that is involved in the production of goods using raw materials and machinery.

Largest Number

Refers to the highest or most significant figure in a given set or range of numbers.

Restructured Partnership

A partnership that has undergone changes in its structure, such as its organization, management, or financial arrangements, to improve efficiency or adapt to new conditions.

Business Termination

The process of permanently closing a business, involving the settling of debts, distribution of remaining assets, and legal formalities.