Which of the following best describes capital widening?

Capital widening occurs when a firm increases its capital stock while maintaining the same ratio of capital to labor. This means that the company is investing in additional capital assets, such as machinery or equipment, without altering the number of workers it employs. As a result, each worker has access to more capital, which can enhance productivity and efficiency. This can lead to increased output without a corresponding increase in the workforce.

The other options do not accurately capture the essence of capital widening. Increased reliance on manual labor would suggest a shift away from capital-intensive processes, while using capital to reduce workforce sizes indicates a focus on automation rather than maintaining worker levels in relation to increased capital. Shifting capital investments into new technologies suggests a different strategy, often termed capital deepening, which involves changing the nature of capital rather than simply increasing its quantity while keeping the labor-to-capital ratio stable.