Answer:
D) Supply is perfectly elastic.
Explanation:
When the supply of a good or service (labor is a service) is perfectly elastic, any decrease in the price will result in the supply falling immediately to 0.
One of the major flaws of classical economists is that they consider labor supply as the same as any other supply, when in the real world labor supply tends to be perfectly inelastic at least for individual workers.
This is simple, no person accepts a lower wage, it doesn't matter if the economy is currently under deflation, or there is a recession, workers will always demand a raise. That doesn't mean that they will get a raise, but no one likes a pay cut.
