The Demand for a Good Is Inelastic

question 130

Multiple Choice

The demand for a good is inelastic. Which of the following would be the most likely explanation for this?

• A) The good is narrowly defined.
• B) The good is broadly defined.
• C) The good costs a large portion of one's total income.
• D) The time interval considered is long.

Realize the importance of specialization and how it affects productivity.

Understand the role of incentives and property rights in economic systems.

Recognize the implications of opportunity costs beyond monetary terms.

Identify the principles behind economic structures, resource ownership, and coordination of economic activities.

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Definitions:

Price Elastic

Refers to the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.

Demand Schedules

A table that shows the quantity of a good or service that consumers are willing and able to purchase at various prices over a given period.

Price Elasticity

The degree to which consumer demand for a product reacts to shifts in its price, showcasing the level of consumer sensitivity to pricing alterations.

Long Run

A period in which all inputs, including physical capital and labor, can be fully adjusted, allowing for analysis of equilibrium and efficiency without the constraints of fixed factors.