Economists Ross Eckert and Richard Leftwich have noted that in the early 1950s, over 60 percent of MBA graduates from leading business schools took their first jobs in manufacturing and 10 percent in investment banking and consulting. Nowadays, no more than 20 percent of MBA graduates from leading business schools take their first jobs in manufacturing and over 50 percent in investment banking and consulting. Between the 1950s and today, furthermore, MBA starting salaries in investment banking and consulting have risen dramatically relative to starting salaries in manufacturing. Using a graphical analysis, explain why this phenomenon is related to a decline in demand for manufactured products and an increase in demand for services over the last half century.
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