The elasticity of resource demand will be greater the
A) smaller the portion of the product's total costs accounted for by the resource.
B) less the elasticity of demand for the product it is producing.
C) easier it is to substitute other resources in production.
D) less the elasticity of resource supply.

Question

Quizplus · Accepted Answer

If it is easy to substitute other resources in production, then the resource demand will be more elastic. This means that even a small change in the resource price will lead firms to substitute other resources, thereby reducing their demand for the original resource.

The Elasticity of Resource Demand Will Be Greater the