Which of the following statements is NOT true for a case in which the demand for labor is more elastic than the supply of labor?
A) Firms can substitute capital for labor if the health insurance on labor gets too costly.
B) Most workers would continue to work even if their wages were lower because of the cost of health insurance.
C) Firms cannot escape the cost of health insurance for labor by employing fewer workers.
D) Firms can move overseas if the tax on labor gets too high.

Question

Quizplus · Accepted Answer

If the demand for labor is more elastic than the supply, firms can reduce their labor force to avoid high costs, such as health insurance, making statement C incorrect.

Which of the Following Statements Is NOT True for a Case