What is likely to cause a high price elasticity of demand for a product? Pick a,b,c, or d a. The product is habit forming b. Expenditure on the product forms a small proportion of total spending c. The product is considered to a be a necessity? d. There were close substitutes to the product?
What is likely to cause a high price elasticity of demand for a product? Pick a,b,c, or d a. The product is habit forming b. Expenditure on the product forms a small proportion of total spending c. The product is considered to a be a necessity? d. There were close substitutes to the product?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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What is likely to cause a high price elasticity of demand for a product? Pick a,b,c, or d
a. The product is habit forming
b. Expenditure on the product forms a small proportion of total spending
c. The product is considered to a be a necessity?
d. There were close substitutes to the product?
Expert Solution
Step 1
The measure that depicts the change in quantity being demanded with respect to change in price level is known as price elasticity of demand.
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