The most important determinant of the price elasticity of demand for a good is
A) the definition of the market for a good.
B) the availability of substitutes for the good.
C) the share of the good in the consumer's budget.
D) whether the good is a necessity or a luxury.
Answer: B
You might also like to view...
Under what conditions would a nation be able to currently produce more of both consumer and capital products?
A legislature that fishing nets to have holes large enough for young fish to avoid capture is a regulatory change aimed at increasing the likelihood of reaching sustainable fish populations
Indicate whether the statement is true or false
The rate at which future money must be discounted is known as the
A. rate of inflation. B. exposure rate. C. discount rate. D. time rate.
For a perfectly competitive firm at its long-run competitive equilibrium point
A. P = AR = MR = MC = LATC = AVC. B. P > MR > AR > MC > LATC > ATC. C. P = AR = MR = LATC = ATC = MC. D. P = AR = MR = LATC > ATC = MC.