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A change in an input price will alter both production costs and the profit-maximizing output. Thus, a decline in the price of capital will reduce production costs, increase the profit-maximizing output,
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A change in an input price will alter both production costs and the profit-maximizing output. Thus, a decline in the price of capital will reduce production costs, increase the profit-maximizing output, and thereby increase the demand for labor. This describes the

User Tigran Petrossian
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Answer:

The Output Effect

Step-by-step explanation:

What is the Output Effect???

Definition: The situation in which an increase in the price of one input will increase a firm's production costs and reduce its level of output, this reducing the demand for other inputs; conversely for a decrease in the price of the input.

User Timothy Britt
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