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A Level Economics Help!

Hi!

Can somebody please explain this to me:

If the price elasticity of demand is relatively elastic (-1 to infinity), there
will be a more than proportionate increase in job losses if wage rates
increase.
If the price elasticity of demand is relatively inelastic (0 to -1), there will be
a less than proportionate fall in job losses resulting if wage rates increase.
Hey, So when talking about labour markets, demand is from the perspective of the employer. So if their ped for labour is elastic, then if there as a rise in the wage rate (increase in price), then there will be a proportionately greater fall in the quantity of labour they demand which is what results in the the job losses. Reverse argument for a price decrease.
Reply 2
Original post by Diri_001
Hey, So when talking about labour markets, demand is from the perspective of the employer. So if their ped for labour is elastic, then if there as a rise in the wage rate (increase in price), then there will be a proportionately greater fall in the quantity of labour they demand which is what results in the the job losses. Reverse argument for a price decrease.


I see. Many thanks!

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