The demand for a factor of production will be more inelastic
A) when the cost of the factor is small relative to the total cost of the product.
B) the more elastic the demand for the final product.
C) the easier it is to substitute other resources for the factor.
D) the more elastic the supply of products produced with the resource.

Question

Quizplus · Accepted Answer

When the cost of a factor is small relative to the total cost of the product, changes in its price have less impact on the overall cost, making demand for that factor more inelastic.

The Demand for a Factor of Production Will Be More