- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 1. The Firm and Market Structures
- Subject 1. Supply Analysis: Cost, Marginal Return, and Productivity
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 ______.
B. relatively elastic
C. relatively inelastic
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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