Consider some determinants of the price elasticity of demand: • The availability of close substitutes • The proportion of a consumer's budget spent on the good • The time horizon being considered A good with many close substitutes is likely to have relatively demand, because consumers can easily choose to purchase one of the close substitutes if the price of the good rises. elastic A good's price elasticity of demand depends in part on how ne inelastic s relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? O Yacht O A heart valve for heart attack victims Price elasticity for a good depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has the most elastic demand? Salt Computer O Laundni dotorgont
Consider some determinants of the price elasticity of demand: • The availability of close substitutes • The proportion of a consumer's budget spent on the good • The time horizon being considered A good with many close substitutes is likely to have relatively demand, because consumers can easily choose to purchase one of the close substitutes if the price of the good rises. elastic A good's price elasticity of demand depends in part on how ne inelastic s relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? O Yacht O A heart valve for heart attack victims Price elasticity for a good depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has the most elastic demand? Salt Computer O Laundni dotorgont
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Consider some determinants of the price elasticity of demand:
• The availability of close substitutes
• The proportion of a consumer's budget spent on the good
• The time horizon being considered
A good with many close substitutes is likely to have relatively
demand, because consumers can easily choose to purchase one of the
close substitutes if the price of the good rises.
elastic
A good's price elasticity of demand depends in part on how ne inelastic s relative to other goods. If the following goods are priced approximately the
same, which one has the least elastic demand?
O Yacht
O A heart valve for heart attack victims
Price elasticity for a good depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has
the most elastic demand?
O Salt
O Computer
O Laundry detergent
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