If a firm's labor input response to a decrease in the wage differs between the short and the long run, we know that more workers will be hired after the initial short run adjustment.

Question

Quizplus · Accepted Answer

If the labor input response differs between the short and the long run, it suggests that the firm has some capacity to adjust its workforce over time. This means that after the initial short run adjustment, the firm may be able to hire more workers as it adapts to the lower wage level. Therefore, the statement is true.

If a Firm's Labor Input Response to a Decrease in the Wage