The more elastic the demand for a product, the less elastic will be the demand for the resources employed in producing it.

Question

Quizplus · Accepted Answer

The elasticity of demand for a product and the elasticity of demand for the resources employed in producing it are not directly related in this manner. The elasticity of demand for a product depends on consumer preferences, availability of substitutes, and the proportion of income spent on the product, among other factors. The elasticity of demand for resources depends on the production technology, the availability of substitute resources, and the overall cost structure of the industry, among other factors.

The More Elastic the Demand for a Product, the Less