If a 10 percent wage increase in a particular labor market results in a 5 percent decline in employment in that market, labor demand is

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Labor demand is considered inelastic when the percentage change in employment is less than the percentage change in wages. In this case, a 10 percent increase in wages leads to only a 5 percent decrease in employment, indicating inelastic demand.

If a 10 Percent Wage Increase in a Particular Labor