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In which situation is it likely that the demand for labou...

In which situation is it likely that the demand for labour would be inelastic?

A.

Labour and capital are close substitutes

B.

Labour costs are only a small proportion of total costs

C.

Demand for the final product that the labour produces is elastic

D.

A large quantity of unemployed labour is available in the economy

Correct answer is B

When specialised labour or capital is needed, then the demand for labour will be more inelastic with respect to the wage rate.