A large-scale farming enterprise uses labour and capital equipment as substitute inputs. If the government introduces a policy to subsidise capital equipment, what effect would this have on the factor inputs?
- Aquantity of labour: decreases; quantity of capital equipment: increases
- Bquantity of labour: decreases; quantity of capital equipment: decreases
- Cquantity of labour: increases; quantity of capital equipment: decreases
- Dquantity of labour: increases; quantity of capital equipment: increases