If a firm adopts a labor-saving piece of technology,it will:

Question

Quizplus · Accepted Answer

Adopting a labor-saving piece of technology reduces the need for labor and therefore decreases the marginal product of labor. The firm may be able to produce the same amount of output with fewer workers, leading to a decrease in the demand for labor and a decrease in the marginal supply of labor. However, it is possible that the increased productivity from the technology could lead to an increase in the overall demand for labor in the long run, depending on market conditions.

If a Firm Adopts a Labor-Saving Piece of Technology,it Will