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15-02-2024
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Explain what happens to the elasticity of demand for labor in a given industry after each of the following events.
a. A new manufacturing technique makes capital easier to substitute for labor.
The elasticity of demand for labor becomes _.
b. There is an increase in the number of substitutes for the final product that labor produces.
The elasticity of demand for labor becomes _.
c. After a drop in the prices of capital inputs, labor accounts for a larger portion of a firm's factor costs.
The elasticity of demand for labor becomes ___.

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