Suppose That the Labor Cost to Total Cost Ratio in Industry

question 203

Multiple Choice

Suppose that the labor cost to total cost ratio in industry A is 82 percent, while in industry B it is 21 percent. Other things equal, labor demand will be

• A)more elastic in industry A than in B.
• B)relatively inelastic in both industries A and B.
• C)more elastic in industry B than in A.
• D)relatively elastic in both industries A and B.

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