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Suppose That the Labor Cost to Total Cost Ratio in Industry

Question 214

Multiple Choice

Suppose that the labor cost to total cost ratio in industry A is 14 percent, while in industry B it is 68 percent. Other things equal, labor demand will be


A) more elastic in industry B than in A.
B) relatively inelastic in both industries A and B.
C) more elastic in industry A than in B.
D) relatively elastic in both industries A and B.

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