In situations where new technologies are considered substitutes for workers, demand for these workers will ________, resulting in ________ in the equilibrium wage.
A)increase; a decrease
B)increase; an increase
C)decrease; a decrease
D)decrease; an increase

Question

Quizplus · Accepted Answer

When new technologies are considered substitutes for workers, demand for workers decreases and this results in a decrease in equilibrium wage. This is because there are now fewer job opportunities available, causing less bargaining power for workers and resultingly lower wages.

In Situations Where New Technologies Are Considered Substitutes for Workers