Factor substitution can occur between renewable and non-renewable resources.

Question

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Factor substitution can occur between different types of resources, including renewable and non-renewable resources, depending on their relative costs and availability. For example, a firm may substitute renewable energy sources, such as wind or solar, for non-renewable energy sources, such as oil or coal, if it becomes more cost-effective or if regulations require it.

Factor Substitution Can Occur Between Renewable and Non-Renewable Resources