When an input represents a small proportion of a firm's total costs, then

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When an input represents a small proportion of a firm's total costs, the firm is less sensitive to changes in the price of that input, and the demand for the input tends to be less elastic. This is because the input cost is a relatively small proportion of the firm's total costs, so changes in its price will have a relatively small impact on the cost of production. Therefore, the firm is less likely to be responsive to changes in input prices and will continue to demand the same amount of the input, even if the price increases.

When an Input Represents a Small Proportion of a Firm's