For the economy as a whole, there is essential no necessary connection.
http://www.pkarchive.org/theory/hotdog.html
For a particular industry or factory it depends on the price elasticity of demand for the good.
http://en.wikipedia.org/wiki/Price_elasticity_of_demand
If the good is highly elastic, then a small drop in price raises demand by a great deal so that even more workers are needed. We've seen this happen many times - for example in the automotive industry when Ford introduced the assembly line which allowed prices to drop and sales to soar - Ford kept expanding and hiring more workers.
Otherwise, if demand is not elastic enough, the firm or industry will need fewer workers. But, historically, those workers have found other jobs, generally without much difficulty.
Some have argued that this may no longer be true; that with automation, there may not be other jobs for displaced workers. That is certainly possible in theory, but there has not been a great deal of evidence that this is the new norm. (There has been evidence that the new jobs pay less than the old, which is not good, but still different from there not being new jobs available and workers becoming unemployed for extended periods.)
For the economy as a whole, there is essential no necessary connection.http://www.pkarchive.org/theory/hotdog.htmlFor a particular industry or factory it depends on the price elasticity of demand for the good.http://en.wikipedia.org/wiki/Price_elasticity_of_demandIf the good is highly elastic, then a small drop in price raises demand by a great deal so that even more workers are needed. We've seen this happen many times - for example in the automotive industry when Ford introduced the assembly line which allowed prices to drop and sales to soar - Ford kept expanding and hiring more workers.Otherwise, if demand is not elastic enough, the firm or industry will need fewer workers. But, historically, those workers have found other jobs, generally without much difficulty.Some have argued that this may no longer be true; that with automation, there may not be other jobs for displaced workers. That is certainly possible in theory, but there has not been a great deal of evidence that this is the new norm. (There has been evidence that the new jobs pay less than the old, which is not good, but still different from there not being new jobs available and workers becoming unemployed for extended periods.)
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