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

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

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

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Take Free Practice Test On 2026 JAMB UTME, Post UTME, WAEC SSCE, GCE, NECO SSCE

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: Option B

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

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