suppose cranes and crane operators are perfect complements. Illustrate and explain how a decrease in the...
suppose cranes and crane operators are perfect complements. Illustrate and explain how a decrease in the price of cranes would affect the quantity of labour demanded (crane operators employed) in the long run.
Homework Answers
Answer : In case of complementary good if the price of one good fall then the quantity demanded of another good increase. Here cranes and crane operators are complement with each other. Now if the price of cranes fall then the quantity demanded for crane operators will increase. Therefore, if price fall for cranes then it will increase the quantity demanded for labor in long run. This is shown by following picture's diagram :
In above picture's diagram we
can see that when the price of cranes falls from P to P1 then the
quantity demanded of crane operators increases from Q to Q1.
Because cranes and crane operators are complement with each
other.
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suppose cranes and crane operators are perfect complements.
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