A new technological invention reduces the cost of manufacturing goods. How will this change affect both markets?

Question

Accepted Answer

The factor market will see reduced demand for labour, and the goods market will experience lower prices.

Answer

The goods market will disappear because firms won’t need labour.

Answer

The factor market and goods market will remain unaffected.

Answer

The goods market will see increased prices, and the factor market will see higher demand for labour.

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