If an increase in the price of one input causes an increase in demand for labor, the two inputs are

Question

Quizplus · Accepted Answer

When an increase in the price of one input causes an increase in demand for labor, it indicates that the two inputs are substitutes. This means that as the cost of one input rises, firms look for alternative inputs, such as labor, to replace the more expensive input, hence increasing the demand for labor.

If an Increase in the Price of One Input Causes