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In Comparing Two Otherwise Identical Industries X and Y,an Economist

Question 1

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In comparing two otherwise identical industries X and Y,an economist finds that labor demand is more elastic in industry X.Which of the following would support this finding?


A) Capital and labor are less easily substituted for one another in X than in Y
B) Labor costs as a percentage of total costs are relatively lower in X than in Y
C) Product demand elasticity is higher in X than in Y
D) Substitute resources have a less elastic supply in X than in Y

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