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Impact of Relative Input Costs on Technological Change
Imagine a country's government significantly increases the national minimum wage, making labor much more expensive relative to the cost of automated machinery. Analyze how this change in relative input costs would likely influence the direction of technological innovation within manufacturing industries. In your response, explain the economic incentives for firms to change their production methods and describe the potential advantage gained by the first companies to adapt.
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Ch.2 Technology and incentives - The Economy 2.0 Microeconomics @ CORE Econ
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