Question

Based on the Marshall Laws of Derived Demand, labor demand is more inelastic when a. workers are making a product that uses a highly labor intensive technology b. workers are making a product with more inelastic demand c. workers are making a product that uses a capital input with elastic supply d. workers are making a product that uses a technology with a fixed labor-capital ratio

Answer 1

b

Step-by-step explanation:

According to Marshall Laws of Derived Demand, labor demand is more inelastic in the following circumstances :

1. the cost of employing labour constitutes a small proportion of the total cost of production.
2. the demand for the product is relatively inelastic
3. labour cannot be easily substituted for in the production process
4. when the supply of other factors of production is inelastic