CFA Practice Question

There are 539 practice questions for this study session.

CFA Practice Question

If the demand for a good is relatively elastic, then the elasticity of demand for the labor used to produce the good will tend to be ______.

A. one
B. relatively elastic
C. relatively inelastic
Correct Answer: B

The elasticity of demand for labor depends on the labor intensity of the production process, the elasticity of demand for the product, and the substitutability of capital for labor.

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