Question

36. What causes labor demand to be more or less elastic?

Answer 1

It can actually be mentioned that labour demand is more elastic when there is high amount of substitutes for labour & one can substitute labour with capital and this means if labour can easily be substituted with capital then an increase in the wage might decrease the quantity demanded for labour to a great extent and this means the demand is relatively elastic

However when there is no substitute or when there's specialisation, where specialised labour are required to do the work and not any other input, In this regard, even though the wage increases it is very important to hire the labour to complete the work as there is no any substitute and that is the reason why the quantity demanded would reduce less proportionately or demand os less elastic in this case.