If a firm's demand for labor is elastic, a union-negotiated wage increase will

A) necessarily be inflationary.
B) cause the firm's total payroll to increase.
C) cause the firm's total payroll to decline.
D) cause a shortage of labor.

Elastic Demand

A situation in economics where the demand for a product is sensitive to price changes, leading to a significant change in quantity demanded if the price increases or decreases.

Wage Increase

Refers to the rise in the hourly, daily, or monthly payments made to employees for their work or services.

Total Payroll

The complete amount of money a business pays to its employees over a specific period, including wages, salaries, bonuses, and deductions.