An inelastic demand for labor means that an increase in the wage rate causes a less than proportionate decrease in the quantity of labor demanded

Economics Dec 17, 2020

An inelastic demand for labor means that an increase in the wage rate causes a less than proportionate decrease in the quantity of labor demanded.

a. true

b. false

Expert Solution

True, an inelastic labor demand curve means that an increase in the wage rate causes a less than proportionate decrease in the quantity of labor demanded. An elastic labor demand curve would cause a proportionate decrease in the quantity of labor demanded. As labor decreases, if the demand curve is inelastic, wages increase aggressively.

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