The more inelastic the consumer demand for the final product, the

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Quizplus · Accepted Answer

The elasticity of demand for the final product does not have a direct impact on economic profit or employment. However, it does affect the elasticity of demand for labor producing the product. The more inelastic the demand for the final product, the less responsive employers will be to changes in the price of labor, as they are less able to pass on increased labor costs to consumers through higher prices. This results in a more inelastic demand for labor.

The More Inelastic the Consumer Demand for the Final Product