If a firm increases the ratio of capital to labor, it becomes more:
A) labor intensive.
B) output intensive.
C) capital intensive.
D) cost intensive.

Question

Quizplus · Accepted Answer

When a firm increases the ratio of capital to labor, it becomes more capital intensive. This means that the firm is relying more on capital equipment and machinery to produce goods or services, rather than on labor. This often leads to increased productivity and output, as well as lower labor costs in the long run.

If a Firm Increases the Ratio of Capital to Labor