Question: a. Use Exhibit to show that when labor and capital are the only inputs and when they are complements in production, the long-run labor demand

a. Use Exhibit to show that when labor and capital are the only inputs and when they are complements in production, the long-run labor demand curve must slope downward.
Labor Demand in the Short Run and the Long Run

b. Use the graphs you prepared for Problem 4a to show that when labor and capital are the only inputs and when they are substitutes in production, the long-run labor demand curve must slopedownward.

Wage rate of labor Rental rate of capital W1 Long-run labor demand MRPL MRP MRP, L3 L2 L1 Lo Labor Capital

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