A life-saving medicine without any close substitutes will tend to have a. a small elasticity of demand . b. a large elasticity of demand. c. a small elasticity of supply. d. a large elasticity of supply.

Question

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Answer 1

Textbook Question

Chapter 5, Problem 1CQQ

A life-saving medicine without any close substitutes will tend to have

a. a small elasticity of demand.

b. a large elasticity of demand.

c. a small elasticity of supply.

d. a large elasticity of supply.

Expert Solution & Answer

To determine

Demand elasticity and substitute.

Answer to Problem 1CQQ

Option ‘a’ is the correct answer.

Explanation of Solution

Option (a):

Lower the availability of substitute, lesser will be the elastic demand. This is because if the price of the good were to increase, people are left with little or no choice but to pay the higher price for it. Since life saving medicine has no close substitute and it has smaller demand elasticity. Thus, option ‘a’ is correct.

Option (b):

More the availability of substitute, more elastic the demand will be. Since life saving medicine has no close substitute, it does not have larger demand elasticity. So option ‘b’ is incorrect.

Option (c):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘c’ is incorrect.

Option (d):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘d’ is incorrect.

Economics Concept Introduction

Concept Introduction:

Elasticity of demand: It measures how much quantity demanded responds to the changes in the price or income.

Substitutes: Substitute goods: Substitute goods are those goods that can be used for the same purpose.

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Answer 2

Textbook Question

Chapter 5, Problem 1CQQ

A life-saving medicine without any close substitutes will tend to have

a. a small elasticity of demand.

b. a large elasticity of demand.

c. a small elasticity of supply.

d. a large elasticity of supply.

Expert Solution & Answer

To determine

Demand elasticity and substitute.

Answer to Problem 1CQQ

Option ‘a’ is the correct answer.

Explanation of Solution

Option (a):

Lower the availability of substitute, lesser will be the elastic demand. This is because if the price of the good were to increase, people are left with little or no choice but to pay the higher price for it. Since life saving medicine has no close substitute and it has smaller demand elasticity. Thus, option ‘a’ is correct.

Option (b):

More the availability of substitute, more elastic the demand will be. Since life saving medicine has no close substitute, it does not have larger demand elasticity. So option ‘b’ is incorrect.

Option (c):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘c’ is incorrect.

Option (d):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘d’ is incorrect.

Economics Concept Introduction

Concept Introduction:

Elasticity of demand: It measures how much quantity demanded responds to the changes in the price or income.

Substitutes: Substitute goods: Substitute goods are those goods that can be used for the same purpose.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 5, Problem 1CQQ

A life-saving medicine without any close substitutes will tend to have

a. a small elasticity of demand.

b. a large elasticity of demand.

c. a small elasticity of supply.

d. a large elasticity of supply.

Expert Solution & Answer

To determine

Demand elasticity and substitute.

Answer to Problem 1CQQ

Option ‘a’ is the correct answer.

Explanation of Solution

Option (a):

Lower the availability of substitute, lesser will be the elastic demand. This is because if the price of the good were to increase, people are left with little or no choice but to pay the higher price for it. Since life saving medicine has no close substitute and it has smaller demand elasticity. Thus, option ‘a’ is correct.

Option (b):

More the availability of substitute, more elastic the demand will be. Since life saving medicine has no close substitute, it does not have larger demand elasticity. So option ‘b’ is incorrect.

Option (c):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘c’ is incorrect.

Option (d):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘d’ is incorrect.

Economics Concept Introduction

Concept Introduction:

Elasticity of demand: It measures how much quantity demanded responds to the changes in the price or income.

Substitutes: Substitute goods: Substitute goods are those goods that can be used for the same purpose.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 5, Problem 1CQQ

A life-saving medicine without any close substitutes will tend to have

a. a small elasticity of demand.

b. a large elasticity of demand.

c. a small elasticity of supply.

d. a large elasticity of supply.

Expert Solution & Answer

To determine

Demand elasticity and substitute.

Answer to Problem 1CQQ

Option ‘a’ is the correct answer.

Explanation of Solution

Option (a):

Lower the availability of substitute, lesser will be the elastic demand. This is because if the price of the good were to increase, people are left with little or no choice but to pay the higher price for it. Since life saving medicine has no close substitute and it has smaller demand elasticity. Thus, option ‘a’ is correct.

Option (b):

More the availability of substitute, more elastic the demand will be. Since life saving medicine has no close substitute, it does not have larger demand elasticity. So option ‘b’ is incorrect.

Option (c):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘c’ is incorrect.

Option (d):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘d’ is incorrect.

Economics Concept Introduction

Concept Introduction:

Elasticity of demand: It measures how much quantity demanded responds to the changes in the price or income.

Substitutes: Substitute goods: Substitute goods are those goods that can be used for the same purpose.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Demand elasticity and substitute.

Answer to Problem 1CQQ

Option ‘a’ is the correct answer.

Explanation of Solution

Option (a):

Lower the availability of substitute, lesser will be the elastic demand. This is because if the price of the good were to increase, people are left with little or no choice but to pay the higher price for it. Since life saving medicine has no close substitute and it has smaller demand elasticity. Thus, option ‘a’ is correct.

Option (b):

More the availability of substitute, more elastic the demand will be. Since life saving medicine has no close substitute, it does not have larger demand elasticity. So option ‘b’ is incorrect.

Option (c):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘c’ is incorrect.

Option (d):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘d’ is incorrect.

Economics Concept Introduction

Concept Introduction:

Elasticity of demand: It measures how much quantity demanded responds to the changes in the price or income.

Substitutes: Substitute goods: Substitute goods are those goods that can be used for the same purpose.

Answer 8

Expert Solution & Answer

To determine

Demand elasticity and substitute.

Answer to Problem 1CQQ

Option ‘a’ is the correct answer.

Explanation of Solution

Option (a):

Lower the availability of substitute, lesser will be the elastic demand. This is because if the price of the good were to increase, people are left with little or no choice but to pay the higher price for it. Since life saving medicine has no close substitute and it has smaller demand elasticity. Thus, option ‘a’ is correct.

Option (b):

More the availability of substitute, more elastic the demand will be. Since life saving medicine has no close substitute, it does not have larger demand elasticity. So option ‘b’ is incorrect.

Option (c):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘c’ is incorrect.

Option (d):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘d’ is incorrect.

Economics Concept Introduction

Concept Introduction:

Elasticity of demand: It measures how much quantity demanded responds to the changes in the price or income.

Substitutes: Substitute goods: Substitute goods are those goods that can be used for the same purpose.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Demand elasticity and substitute.

Answer 12

Answer to Problem 1CQQ

Option ‘a’ is the correct answer.

Answer 13

Explanation of Solution

Option (a):

Lower the availability of substitute, lesser will be the elastic demand. This is because if the price of the good were to increase, people are left with little or no choice but to pay the higher price for it. Since life saving medicine has no close substitute and it has smaller demand elasticity. Thus, option ‘a’ is correct.

Option (b):

More the availability of substitute, more elastic the demand will be. Since life saving medicine has no close substitute, it does not have larger demand elasticity. So option ‘b’ is incorrect.

Option (c):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘c’ is incorrect.

Option (d):

More the availability of substitute, more elastic the demand will be, and it does not affect elasticity of the supply. So option ‘d’ is incorrect.

Answer 14

Economics Concept Introduction

Concept Introduction:

Elasticity of demand: It measures how much quantity demanded responds to the changes in the price or income.

Substitutes: Substitute goods: Substitute goods are those goods that can be used for the same purpose.

Answer 15

Ch. 5.1 - Define the price elasticity of demand. Explain...Ch. 5.2 - Define the price elasticity of supply. Explain...Ch. 5.3 - Prob. 3QQ Ch. 5 - A life-saving medicine without any close...Ch. 5 - The price of a good rises from 8 to 12, and the...Ch. 5 - A linear, downward-sloping demand curve is a....Ch. 5 - Prob. 4CQQ Ch. 5 - An increase in the supply of a good will decrease...Ch. 5 - Over time, technological advance increases...Ch. 5 - Prob. 1QR

A life-saving medicine without any close substitutes will tend to have a. a small elasticity of demand . b. a large elasticity of demand. c. a small elasticity of supply. d. a large elasticity of supply.

Solution Summary: The author explains that if the price of the good were to increase, people would be left with little or no choice but to pay the higher price for it.

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Answer to Problem 1CQQ

Explanation of Solution

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Chapter 5 Solutions