All of the following make the demand for labor more elastic except

a. the longer the time period under consideration.

b. the smaller the proportion of total costs accounted for by labor.

c. the easier it is to substitute another input for labor.

d. greater elasticity of demand for the final product.

• The correct option is (b). The smaller the proportion of total costs accounted for by labor.

In the case of the elasticity of demand for labor, the change in the demand for labor is measured when wage rate changes. However, if the labor accounts for a higher proportion of total cost then a little change in the wage rate will cause a significant change in the demand for labor.

But, if labor accounts for a little proportion of total cost then there will be a small change in demand for labor in response to a larger change in the wage rate.