This paper attempts to build a model explaining the long run own-priceelasticity of demand for labour-hours at the Danish Steelworks, Ltd. The model isconstrained to conceive the firm as isolated from the rest of the steelworksindustry. The theoretical mathematical foundation explaining labour supply, labourdemand,- and the firms responsiveness to factor price changes is built. Next, thestudy proceeds with a static analysis where the Cobb-Douglas production function'sparameters are estimated, under the assumptions of homogeneous labour-hours andproduction output. Last, the estimates of the firm's responsiveness to increase inlabour-hours cost concerning employment of labour-hours are given and itsimplications are discussed. The study finds that an increase in cost of labour-hours will force the firm toexpand output, and hence, reduce the degree of the substitution away fromlabour-hours. This interesting result is explained under the assumption that theproduction function is homogeneous and that the firm is operating on an increasingreturn to scale.