What is the importance of elasticity of demand in the case of factor pricing?

Profitable price discrimination

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Determination of terms of trade

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Increase in wages of workers

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Raise revenue from taxation

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Solution

The correct option is C
Increase in wages of workers

The factor of production for which demand is less elastic can obtain a higher price as compared to those having elastic demand. Workers producing products having inelastic demand can easily a raise, so their wages increase

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Similar questions

Which of the following is not a factor for determining the price elasticity of demand?

Explain any two factors that affect the price elasticity of demand. Give suitable examples.

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