The Figure Given Below Represents Equilibrium in the Labor Market

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6
In the figure,
D = MRP implies demand for labor = Marginal Revenue Product
MFC represents Marginal Factor Cost curve
S represents the supply curve of labor

-The demand for capital, as an input in production, will decrease if:

A) labor and capital are substitutes in production and the supply of labor decreases.
B) the demand for the final good it produces increases.
C) capital becomes more productive.
D) the price of capital decreases.
E) labor and capital are substitutes in production and the wage rate declines.

Correct Answer:

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