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Demand for a good will tend to be more inelastic if it exhibits which of the following characteristics?
- a)The good has many substitutes.
- b)The good is a luxury (as opposed to a necessity).
- c)The good is a small part of the consumer ’s income.
- d)There is a great deal of time for the consumer to adjust to the change in prices.
Correct answer is option 'C'. Can you explain this answer?
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Demand for a good will tend to be more inelastic if it exhibits which ...
Characteristics of Inelastic Demand
Inelastic demand refers to the situation where the quantity demanded of a good is relatively unaffected by changes in its price. The demand for a good will tend to be more inelastic if it exhibits the following characteristics:
1. Small Part of Consumer's Income
Goods that represent a small portion of a consumer's income tend to have more inelastic demand. This is because consumers are less sensitive to changes in the price of goods that represent a small portion of their income. For example, a 10% increase in the price of gasoline will have a smaller effect on a person's budget if they only drive a few miles a week than if they drive hundreds of miles a week.
2. Necessity
Goods that are considered necessities tend to have more inelastic demand. This is because consumers have no choice but to purchase these goods regardless of their price. For example, people need to eat food regardless of the price, so the demand for food is generally inelastic.
3. Lack of Substitutes
Goods that have few or no substitutes tend to have more inelastic demand. This is because consumers have no alternatives to turn to if the price of the good increases. For example, prescription drugs often have no substitutes, so the demand for these drugs is generally inelastic.
4. Short Time to Adjust
Goods that have a short time frame for the consumer to adjust to price changes tend to have more inelastic demand. This is because consumers do not have enough time to find alternatives to the good. For example, if the price of gasoline increases overnight, consumers do not have enough time to find alternative modes of transportation.
Conclusion
In conclusion, the demand for a good will tend to be more inelastic if it represents a small portion of the consumer's income. This is because consumers are less sensitive to changes in the price of goods that represent a small portion of their income.
Inelastic demand refers to the situation where the quantity demanded of a good is relatively unaffected by changes in its price. The demand for a good will tend to be more inelastic if it exhibits the following characteristics:
1. Small Part of Consumer's Income
Goods that represent a small portion of a consumer's income tend to have more inelastic demand. This is because consumers are less sensitive to changes in the price of goods that represent a small portion of their income. For example, a 10% increase in the price of gasoline will have a smaller effect on a person's budget if they only drive a few miles a week than if they drive hundreds of miles a week.
2. Necessity
Goods that are considered necessities tend to have more inelastic demand. This is because consumers have no choice but to purchase these goods regardless of their price. For example, people need to eat food regardless of the price, so the demand for food is generally inelastic.
3. Lack of Substitutes
Goods that have few or no substitutes tend to have more inelastic demand. This is because consumers have no alternatives to turn to if the price of the good increases. For example, prescription drugs often have no substitutes, so the demand for these drugs is generally inelastic.
4. Short Time to Adjust
Goods that have a short time frame for the consumer to adjust to price changes tend to have more inelastic demand. This is because consumers do not have enough time to find alternatives to the good. For example, if the price of gasoline increases overnight, consumers do not have enough time to find alternative modes of transportation.
Conclusion
In conclusion, the demand for a good will tend to be more inelastic if it represents a small portion of the consumer's income. This is because consumers are less sensitive to changes in the price of goods that represent a small portion of their income.
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Demand for a good will tend to be more inelastic if it exhibits which ...
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Demand for a good will tend to be more inelastic if it exhibits which of the following characteristics?a)The good has many substitutes.b)The good is a luxury (as opposed to a necessity).c)The good is a small part of the consumer ’s income.d)There is a great deal of time for the consumer to adjust to the change in prices.Correct answer is option 'C'. Can you explain this answer?
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Demand for a good will tend to be more inelastic if it exhibits which of the following characteristics?a)The good has many substitutes.b)The good is a luxury (as opposed to a necessity).c)The good is a small part of the consumer ’s income.d)There is a great deal of time for the consumer to adjust to the change in prices.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Demand for a good will tend to be more inelastic if it exhibits which of the following characteristics?a)The good has many substitutes.b)The good is a luxury (as opposed to a necessity).c)The good is a small part of the consumer ’s income.d)There is a great deal of time for the consumer to adjust to the change in prices.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Demand for a good will tend to be more inelastic if it exhibits which of the following characteristics?a)The good has many substitutes.b)The good is a luxury (as opposed to a necessity).c)The good is a small part of the consumer ’s income.d)There is a great deal of time for the consumer to adjust to the change in prices.Correct answer is option 'C'. Can you explain this answer?.
Demand for a good will tend to be more inelastic if it exhibits which of the following characteristics?a)The good has many substitutes.b)The good is a luxury (as opposed to a necessity).c)The good is a small part of the consumer ’s income.d)There is a great deal of time for the consumer to adjust to the change in prices.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Demand for a good will tend to be more inelastic if it exhibits which of the following characteristics?a)The good has many substitutes.b)The good is a luxury (as opposed to a necessity).c)The good is a small part of the consumer ’s income.d)There is a great deal of time for the consumer to adjust to the change in prices.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Demand for a good will tend to be more inelastic if it exhibits which of the following characteristics?a)The good has many substitutes.b)The good is a luxury (as opposed to a necessity).c)The good is a small part of the consumer ’s income.d)There is a great deal of time for the consumer to adjust to the change in prices.Correct answer is option 'C'. Can you explain this answer?.
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