Answer:
As the question was not complete. I have attached the complete question in the attachment. Please refer to attachment.
Explanation:
By using, LD = 95- 3w and w1 = 7.25 and w2 = 9. We get,
LD1 = 95-3(7.25) = 73.25
LD2 = 95-3(9) = 68
Elasticity = Change in labor demand/ change in wage rate = ((68- 73.25)/ 73.25)/ ((9-7.25/7.25)) = -0.33
The 11 percent change in the wage rate causes, 33% change in labor demanded, as shown by the elasticity, the labor demand decreases with increase in wage rate.
