Other Things Equal, the Relationship Between the Relative Importance of a Given

question 351

Multiple Choice

Other things equal, the relationship between the relative importance of a given type of labor in a firm's total costs and the elasticity of demand for that labor is such that the

• A)demand for labor will be elastic only if labor accounts for less than 50 percent of total costs.
• B)demand for labor will be elastic only if labor accounts for 50 percent or more of total costs.
• C)larger the labor cost to total cost ratio, the smaller will be the elasticity of labor demand.
• D)larger the labor cost to total cost ratio, the greater will be the elasticity of labor demand.

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