Demand is likely to be more price-elastic: (Check all that apply.) When the price of the...
Demand is likely to be more price-elastic: (Check all that apply.)
|
When the price of the good is a larger portion of your income |
|
|
In the short run than in the long run |
|
|
When fewer substitutes are available |
|
|
When there are more competing firms selling similar goods |
Homework Answers
Answer
Option 1 and 4
a larger portion is spent then the demand is more elastic because the change in price by a small amount also increases income effect and increases quantity or decreases quantity.
If there are more substitute means When more competing firms are selling similar goods then also buyer has the option to substitute, so the demand is price elastic as the price changes the quantity demanded changes.
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