The input demand curve is likely to be relatively more elastic when:
A)the demand for the final product is relatively elastic.
B)it is difficult to substitute the input for another input in production.
C)the supply of other inputs is relatively inelastic.
D)demand for the input is measured over a short time period.

Question

Quizplus · Accepted Answer

When the demand for the final product is relatively elastic, it means that consumers are sensitive to changes in the price of the final product. This, in turn, can put pressure on the firms to keep their costs low, including the cost of inputs. As a result, the input demand curve is likely to be relatively more elastic, as firms will be more responsive to changes in input prices.

The Input Demand Curve Is Likely to Be Relatively More