We would expect that a fall in labor supply will have a proportionately larger effect on the market wage rate when
A) capital goods exist that can replace many of the workers.
B) the product produced in the industry has several close substitutes.
C) the product produced in the industry makes up a large portion of most families' budgets.
D) labor represents a relatively small portion of total costs.
Correct Answer:
Verified
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A)
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