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1. Which of the following will not affect the elasticity of demand for a product?

a. the number of substitutes

b. how long consumers have to adapt to price changes

c. the cost of producing the product

d. the percentage of the consumer's budget spent on the product

e. all of the above will affect the elasticity of demand for a product

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Nestor Rutherford
Nestor RutherfordLv2
20 Feb 2020

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Related questions

Which of the following goods will have a higher price elasticity of demand?

a. A good with few substitutes.

b. A good with many substitutes.

c. A good that represents a small proportion of the consumer's budget.

d. A good that is broadly defined.

e. A good that is a necessity.

Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand:
• Number of substitutes
• Whether the good is a necessity or a luxury
• Percentage of one's budget spent on the good
• Time horizon being considered
 
A. A good with many close substitutes is likely to have relatively ___________ demand since consumers can easily choose to purchase one of the close substitutes if the price of the good rises.
 
B. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand?
1. Chemotherapy for cancer patients
2. Yacht
 
The price elasticity of demand for good also depends on how you define the good.
 
C. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between.
1. Beverages
2. Merlot
3. Wine
 
D. The price elasticity of demand is also affected by the given time horizon. Other things being equal, the demand for natural gas will tend to be _________ elastic in the short run than in the long run.

 

Which of the following statements about price elasticity of demand is most accurate?
 
(i) Price elasticity with inelastic demand must always be greater than one.
(ii) The more substitutes a product has, the less likely it is to be price elastic.
(iii) Unitary demand represents the relationship between the cash outlay necessary to purchase a product, relative to a person's disposable income.
(iv) With inelastic demand, reducing price will result in an increase in total revenue though not necessarily an increase in profit.
(v) Items requiring large cash outlay relative to the consumer's disposable income are price elastic.

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