Why might the elasticity of demand for labor be relevant to an economist studying the impact of an increase in the minimum wage? The more elastic the demand for labor, the more firms will decrease the amount of labor they hire as a result of the minimum wage increase. The more inelastic the demand for labor, the more firms will increase the amount of labor they hire as a result of the minimum wage increase. The more elastic the demand for labor, the more firms will increase the amount of labor they hire as a result of the minimum wage increase. The more inelastic the demand for labor, the more firms will decrease the amount of labor they hire as a result of the minimum wage increase.