Suppose the economy takes a downturn, and that labor costs fall by 50% and are expected to

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Suppose the economy takes a downturn, and that labor costs fall by 50% and are expected to stay at that level for a long time. Show graphically how this change in the relative price of labor and capital affects the firm’s expansion path.
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Microeconomics

ISBN: 978-0132857123

8th edition

Authors: Robert Pindyck, Daniel Rubinfeld

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