# If the absolute elasticity of labor demand is 2.0, then an eight percent increase in the wage...

## Question:

If the absolute elasticity of labor demand is {eq}\displaystyle 2.0 {/eq}, then an eight percent increase in the wage will decrease employment by how many percentage?

## Elasticity Coefficient:

In the parlance of economics, the concept of elasticity is used to denote the sensitivity of one variable such as quantity demanded, quantity supplied, or labor demand to variables such as a change in price or change in wages. On the basis of the magnitude of elasticity, one may categorize the demand or supply as elastic, inelastic, or unitary elastic.