The table below provides the information about the labour demand for Happy Inn at a

small city.

Wage (S). number of hours

20. 3

16. 4

12. 5

8. 6

4. 7

Number of Hours

a. Draw the labour demand curve for Happy Inn.

b. Calculate the wage elasticity of demand for the points along the labour demand curve.

Show whether the elasticity is elastic, inelastic, or unit elastic.

c. As you move downwards along the labour demand curve, is it becoming more or less

elastic?

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