Which of the following generalizations is not correct? The larger an item is in one's budget, the greater the price elasticity of demand. The price elasticity of demand is greater for necessities than it is for luxuries. The larger the number of close substitutes available, the greater will be the price elasticity of demand for a particular product. The price elasticity of demand is greater the longer the time period under consideration.

Managerial Economics: A Problem Solving Approach
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Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
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Which of the following generalizations is not correct?
The larger an item is in one's budget, the greater the price elasticity of demand.
The price elasticity of demand is greater for necessities than it is for luxuries.
The larger the number of close substitutes available, the greater will be the price elasticity of demand for a particular product.
The price elasticity of demand is greater the longer the time period under consideration.
Transcribed Image Text:Which of the following generalizations is not correct? The larger an item is in one's budget, the greater the price elasticity of demand. The price elasticity of demand is greater for necessities than it is for luxuries. The larger the number of close substitutes available, the greater will be the price elasticity of demand for a particular product. The price elasticity of demand is greater the longer the time period under consideration.
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