Why is the short run labor demand curve less elastic relative to the long run labor demand curve?
A. Labor is a normal good.
B. Isoquant lines get shallower when the wage increases.
C. Firms care about changes in wages in the short run but not in the long-run.
D. A perfectly competitive firm can always pay lower wages in the long run.
E. Firms are better able to substitute capital for labor in the long run compared to the short run.
Answer: E
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