Asked by Natalee Hines on May 26, 2024

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Suppose that a union successfully negotiated a 10 percent wage increase and the quantity of labor demanded increased by 10 percent.We can conclude that:

A) the labor demand curve must have independently shifted to the right.
B) labor demand is highly elastic.
C) the coefficient of labor demand elasticity is less than 1.
D) labor demand is unit-elastic.

Unit-elastic

A situation in which the percentage change in quantity demanded is equal to the percentage change in price, indicating a unitary elasticity of demand.

Labor Demand

Refers to the quantity of workers that employers are willing to hire at a given wage rate.

  • Learn the effects of wage changes on the quantity of labor demanded and the elasticity of labor demand.
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AS
Ananya SharmaMay 30, 2024
Final Answer :
A
Explanation :
If the wage increase caused an increase in the quantity demanded of labor, then it indicates that the demand curve for labor must have shifted to the right. This could be due to various reasons such as an increase in demand for the output produced or an increase in the productivity of workers. The other answer choices do not necessarily follow from the given information.