The greater the elasticity of demand for a final product, we find ________ the demand for the factor inputs.

Question

Quizplus · Accepted Answer

The greater the elasticity of demand for a final product, the more sensitive consumers are to price changes. This sensitivity translates to the demand for factor inputs, as producers will adjust their production and input usage based on consumer demand elasticity. If demand for the final product is highly elastic, producers will be more responsive in adjusting factor inputs to meet changes in demand, leading to greater variability in the demand for factor inputs.

The Greater the Elasticity of Demand for a Final Product