Sailmaster makes high-performance sails for competitive windsurfers. The following is information about the inputs and outputs for one model, the Windy 2000. Units sold 1,221
Sale price each $ 1,704
Total labor hours 46,555
Wage rate $ 13 /hour
Total materials 61,000
Total energy $ 4,005
Calculate the productivity in sales revenue/labor expense. (Round your answer to 2 decimal places.)

B. Fewer workers will be needed.

Explanation:

Elastic demand refers to a flexible demand. It is a demand that can increases or decreases due to several factors. If demand is not elastic, it implies it is constant. An increase or decrease in output or price will not affect the quantity demanded.

An increase in productivity means an increase in output per worker. It is the increase in the number of units produced, per hour, per worker. An increase in productivity results in more output in a given period than previously.

If the demand is constant and there is an increase in productivity, only a few workers will be required. The output from the few workers will be high to meet the constant demand.