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How is firms productivity affected

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Reference no: EM132173659

A labor intensive firm in china is faced with rising labor cost.

  • How is firms productivity affected? Explain & why?
  • Should the firm adjust its capital- labor ratio to shift toward capital intensive mode of production? Can you illustrate your suggestion with a graph of isoquant & isocost curve?
  • With the rising domestic labor cost, do you think china has any advantage to keep foreign investment at home?

Reference no: EM132173659

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