If the absolute price elasticity of demand for a product is less than 1, then
A) consumers are relatively sensitive to price changes.
B) consumers are relatively insensitive to price changes.
C) there is a positive relationship between price changes and the quality of the product.
D) producers are relatively insensitive to price changes.
Answer: B
You might also like to view...
What creates an incentive for firms in a collusive agreement to cheat and increase output?
What will be an ideal response?
Cross country data illustrates that rapid expansion in the supply of money over a lengthy period of time (for example, a decade) leads to
a. rapid growth of real output. b. a low real rate of interest. c. high rates of inflation. d. an inflow of capital and a high rate of investment.
As the money wage rate increase...
What will be an ideal response?
According to the law of demand, ceteris paribus,
A. The responsiveness of consumer demand to a change in the price of a good is measured by the price elasticity of demand. B. A consumer will purchase more of a good at higher prices than at lower prices. C. The quantity demanded increases at lower prices. D. Price and quantity supplied are directly related.