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Union A faces a demand curve in which a wage of $4 per hour leads to...

Union A faces a demand curve in which a wage of $4 per hour leads to demand for 20,000 person hours and a wage of $5 per hour leads to demand for 10,000 person hours. Union B faces a demand curve in which a wage of $6 per hour leads to demand for 30,000 person hours, while a wage of $5 per hour leads to demand for 33,000 person hours. Which union faces the more elastic demand? Explain.

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Answer #1

As we know , if the elasticity is greater than 1 that means it is elastic demand curve.

If the elasticity is less than 1 that means it is in elastic demand curve.

There is negative relationship between wage and demand for labour.

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