List five factors that affect elasticity of demand and briefly describe how each affects demand.
What will be an ideal response?
AVAILABILITY OF SUBSTITUTE GOODS AND SERVICES. When many product substitutes are available, the consumer can easily switch from one product to another. This makes demand more elastic.
PRICE RELATIVE TO A CONSUMER'S PURCHASING POWER. Low price relative to the purchasing power of the consumer results in relatively inelastic demand, as long as changes in price are perceived as inconsequential.
PRODUCT DURABILITY. Durable products last a long time and often offer the consumer the option for repair rather than replacement. This results in elastic demand.
PRODUCT'S OTHER USES. The greater the number of product uses, the more elastic demand will tend to be. As price varies for a product with a wide variety of applications, substitutability becomes an issue.
RATE OF INFLATION. Recent research has found that when a country's inflation rate (the rate at which the price level is rising) is high, demand becomes more elastic. In other words, rising price levels make consumers more price sensitive.
You might also like to view...
According to House's revised path-goal theory, a leader's style should vary depending on which of the following?
A. Positional power B. Environmental factors C. Situational control D. Organizational readiness E. Leader-member relations
Analyzing ________ involves focusing on information needs, motivation and benefits, and potential resistance
A) your audience's needs B) your purpose C) medium choices D) your desired outcome E) the business result
Sales call allocation is the time spent by the salesperson calling on accounts excluding the traveling time.
Answer the following statement true (T) or false (F)
An oral will can also be referred to as:
A) a pour-over will. B) a nuncupative will. C) a joint will. D) a codicil.