Which of the following statements is true?
A)The lower the elasticity of demand for cars, the higher the elasticity of demand for the workers that produce cars.
B)The higher the elasticity of demand for cars, the lower the elasticity of demand for the workers that produce cars.
C)The lower the elasticity of demand for cars, the lower the elasticity of demand for the workers that produce cars.
D)The fewer the substitute factors for union labor, the higher the elasticity of demand for union labor.

Question

Quizplus · Accepted Answer

The elasticity of demand for cars and the workers that produce cars are unrelated. Option C is the only statement that is logically sound as a lower elasticity of demand for cars means that the demand for cars will not change much even if there is a change in price, and therefore, the demand for workers who produce cars is also unlikely to change much. Option A and B are contradictory and incorrect. Option D is incomplete and unrelated to the original question as it talks about the elasticity of demand for union labor, which is not mentioned in the question.

Which of the Following Statements Is True