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
A)unit-elastic.
B)elastic.
C)inelastic.
D)perfectly elastic.

Question

Quizplus · Accepted Answer

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