If the demand for a certain type of labor is elastic, a(n) _______ in its price will lead to a(n) _______ in total spending on that type of labor by firms.
A) increase; decrease
B) decrease; decrease
C) increase; increase
D) decrease; no change

Question

Quizplus · Accepted Answer

When the demand for a certain type of labor is elastic, an increase in its price will lead to a proportionally larger decrease in the quantity demanded, resulting in a decrease in total spending on that type of labor by firms.

If the Demand for a Certain Type of Labor Is