Which of the following statements is true? Other things equal, the demand for labor will be less elastic the
A) easier it is to substitute capital for labor.
B) greater the elasticity of resource supply.
C) greater the elasticity of product demand.
D) smaller the ratio of labor costs to total costs.

Question

Quizplus · Accepted Answer

The demand for labor is less elastic when labor costs constitute a smaller portion of total costs, as changes in labor costs have a smaller impact on overall production costs.

Which of the Following Statements Is True? Other Things Equal