Labor Market Comparisons Are More Important Than Product Market Comparisons

question 83

Multiple Choice

Labor market comparisons are more important than product market comparisons when

• A)product demand is elastic.
• B)the costs of recruiting replacements are low.
• C)attracting and retaining qualified employees is difficult.
• D)the supply of labor is inelastic.
• E)employee skills are specific to the product market.

---

Definitions:

Higher Prices

Charging more for goods or services, often due to increased demand, higher costs of production, or added value.

Substitute Products

Products for which changes in demand are negatively related; that is, a percentage increase in the quantity demanded for product A results in a percentage decrease in the quantity demanded for product B.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, often influencing pricing strategies.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price over a specified period.