K₁ Ko K Slope =-w₁/ro E₁ Es M N₁ N₂ E No Qo Q₁ P Slope =-Wo/ro N Suppose Qo is the profit-maximizing quantity of output

[answerhappygod]

K Ko K Slope W Ro E Es M N N E No Qo Q P Slope Wo Ro N Suppose Qo Is The Profit Maximizing Quantity Of Output 1 (105.67 KiB) Viewed 9 times

K Ko K Slope W Ro E Es M N N E No Qo Q P Slope Wo Ro N Suppose Qo Is The Profit Maximizing Quantity Of Output 2 (181.15 KiB) Viewed 9 times

K₁ Ko K Slope =-w₁/ro E₁ Es M N₁ N₂ E No Qo Q₁ P Slope =-Wo/ro N

Suppose Qo is the profit-maximizing quantity of output when wage is wo and cost of capital is ro, and Q₁ is the profit-maximizing quantity of output when wage is w₁ and cost of capital is ro. Which of the following is true? O a. The scale effect on labour increases demand for labour. O b. The substitution effect on labour is larger than the scale effect. O c. The substitution effect on labour is smaller than the scale effect. O d. The scale effect on capital increases demand for capital.