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Economics · Oct / Nov 2017 · Paper 12 · Question 9

2281Firms and production

Which change will make a manufacturing company replace machines with labour to maintain the most efficient combination of factors of production?

  1. AThe price of the product manufactured has increased.
  2. BThe productivity of labour has increased.
  3. CThe productivity of machinery has increased.
  4. DThe wages of labour have increased.

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Correct answer: B. The productivity of labour has increased.

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