Asked by abhishek dadhwal on Apr 28, 2024
Verified
Suppose that a union successfully negotiated a 10 percent wage increase and the quantity of labor demanded decreased by 10 percent.Given a fixed labor demand curve,we can conclude that:
A) the labor demand curve is upsloping.
B) labor demand is elastic.
C) labor demand is unit-elastic.
D) the coefficient of elasticity of labor demand is less than 1.
Unit-elastic
Unit-elastic refers to a situation in which the percentage change in quantity demanded or supplied is equal to the percentage change in price.
Elasticity
A measure of how much the quantity demanded or supplied of a good changes in response to a change in price.
- Understand how alterations in wages influence the demand for labor and its elasticity.
Verified Answer
MR
Maddie RandolphMay 03, 2024
Final Answer :
C
Explanation :
Labor demand is unit-elastic because the percentage change in the quantity of labor demanded is equal to the percentage change in wages, indicating a one-to-one proportional change.
Learning Objectives
- Understand how alterations in wages influence the demand for labor and its elasticity.
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