The Relationship Between the Elasticity of Product Demand and the Elasticity

question 212

Multiple Choice

The relationship between the elasticity of product demand and the elasticity of demand for labor employed in its production is such that, other things being equal,

• A) the more elastic the demand for the product, the less elastic the demand for labor.
• B) the more elastic the demand for the product, the more elastic the demand for labor.
• C) the elasticity of product demand only affects the elasticity of labor demand when the product market is purely competitive.
• D) if product demand is perfectly elastic, labor demand will be perfectly inelastic.

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