If the demand for a product is inelastic, which of these statements must be true?
(A) Customers are sensitive to the price of the product.
(B) A price increase does not have a significant impact on buying habits.
(C) There are very few satisfactory substitutes for the product.
(D) People will not buy any of the product when the price goes up.
Ans: (B) A price increase does not have a significant impact on buying habits.
You might also like to view...
Purchasing power parity can be used as
A) a long-run gauge, but in the short run large deviations in currency values can exist. B) a short-term gauge, but in the long run large deviations in currency values can exist. C) an indicator of how interest rates will change in the short run. D) an indicator of how interest rates will change in the long run. E) a short-term and long-term gauge of relative currency values.
A market supply curve is determined by
a. vertically summing individual supply curves. b. horizontally summing individual supply curves. c. finding the average quantity supplied by sellers at each possible price. d. finding the average price at which sellers are willing and able to sell a particular quantity of the good.