If workers are employed in an industry where they cannot be easily replaced, then the demand curve of labor will be relatively more _____, and an increase in minimum wage will lead to ____ job losses compared to industries where close substitutes of labor are available.
A) elastic; more
B) elastic; fewer
C) inelastic; more
D) inelastic; fewer

Question

Quizplus · Accepted Answer

In industries where workers cannot be easily replaced, the demand for labor is more inelastic because employers cannot easily find substitutes for their labor. Therefore, an increase in minimum wage in such industries will lead to fewer job losses, as employers are more likely to absorb the increased costs due to the difficulty of replacing their workers.

If Workers Are Employed in an Industry Where They Cannot