What is the input-substitution effect?
What will be an ideal response?
The change in the quantity of labor demanded resulting from a change in the relative price of labor relative to the price of other inputs.
You might also like to view...
Which of the following statements is false?
A. While managers must understand how output prices are determined, determination of input prices is irrelevant because it is beyond the manager's control. B. Output prices influence a firm's revenues. C. Input prices influence a firm's costs of production. D. Price determination is the key element in any market system.
Spending a lot on advertising:
A. can act as a credible signal to consumers of high-quality products. B. can act as a credible signal to producers to create high quality substitutes. C. does not serve as a credible signal to consumers, since any producer can do it. D. can act as a credible signal to consumers of low-quality products.