Does the elasticity of demand for labor matter? Cite empirical evidence that supports your viewpoint.


1 Answers

Fernando Bonilla Profile
Are you talking about the analysis of supply and demand?
Well you try to low wage based on the amount of employees you have for example at this moment we have insufficient jobs compare with the unemployed workers you have so you have elasticity to reduce salaries.
Greater numbers of workers are willing to work at lower wage while a smaller numbers of jobs will be available at the higher wage. Companies can be more selective in those whom they employ thus the least skilled and least experienced will typically be excluded.
Above the equilibrium wage, minimum wage laws should cause unemployment

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