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Homework answers / question archive / 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
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
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.
