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Answer to Question #135497 in Microeconomics for Jennifer

Question #135497
A company is using labour and capital for producing its product. The Union negotiates for 30% salary increment . Discuss the substitution and scale effects on labour demand resulting from such a salary increment.
1
Expert's answer
2020-09-28T10:18:31-0400

Because of salary increment the company will want to hire fewer employees. Resulting to decrease in quantity of labour demanded.


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