Before ATMs, the average bank branch employed 20 employees; after ATMs, the average branch employed 13 employees, but banks have opened more branches. These developments suggest that
A)ATMs are purely substitutes for labor in banking.
B)labor and ATMs are substitutes in some bank functions, complements in others.
C)ATMs are purely complements for labor in banking.
D)labor and ATMs are neither substitutes nor complements in banks' various functions.

Question

Quizplus · Accepted Answer

ATMs have reduced the number of employees needed per branch, indicating they substitute labor in some functions (like cash withdrawals). However, the opening of more branches suggests that ATMs also enable banks to expand their operations, implying they complement labor in other aspects (like customer service or sales), hence labor and ATMs act as substitutes in some functions and complements in others.

Before ATMs, the Average Bank Branch Employed 20 Employees; After