Asked by Praveeni Sooriyamudali on Jul 18, 2024
Verified
The more elastic the demand for a product, the less elastic will be the demand for the resources employed in producing it.
Elastic Demand
A situation in which the demand for a product is sensitive to price changes, with significant changes in demand occurring with small changes in price.
Resource Demand
The demand for resources or inputs (like labor, capital, and raw materials) that are necessary for production.
- Acquire insight into the repercussions of product demand elasticity on labor demand and the resulting effect on the elasticity of demand for labor.
Verified Answer
GL
Gabriella LopezJul 19, 2024
Final Answer :
False
Explanation :
The elasticity of demand for a product and the elasticity of demand for the resources employed in producing it are not directly related in this manner. The elasticity of demand for a product depends on consumer preferences, availability of substitutes, and the proportion of income spent on the product, among other factors. The elasticity of demand for resources depends on the production technology, the availability of substitute resources, and the overall cost structure of the industry, among other factors.
Learning Objectives
- Acquire insight into the repercussions of product demand elasticity on labor demand and the resulting effect on the elasticity of demand for labor.
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