A good with many close substitutes is likely to have an elastic demand because ______. 1. If the price rises, consumers can choose to purchase one of the close substitutes instead 2. Consumers with brand loyalty won't change their buying habits, even if the price changes 3. The laws of supply and demand will drive the equilibrium price down
For a good that is a necessity, 1. quantity demanded tends to respond substantially to a change in price. 2. demand tends to be inelastic. 3. the law of demand often does not apply. 4. All of the above are correct.
Price elasticity of demand for a good depends on how one defines the good. For example, one could look at the market for a particular kind of food, or the market for food in general. Of the following categories, which one has the LEAST elastic demand? 1. Food 2. Vegetables 3. Bell peppers 4. Red bell peppers
The demand for a good is more elastic 1. Over one day 2. Over one year 3. Over ten years 4. It doesn't matter, demand has the same elasticity over all time periods
Consumers tend to be more sensitive to changes in price when prices are relatively higher because 1. They cost more 2. The goods make up a greater percentage of their income 3. Consumers buy less of goods at higher prices 4. The law of demand