The Demand for a Product Is Likely to Be More

question 71

Multiple Choice

The demand for a product is likely to be more elastic

• A) the shorter the time the consumer has to adjust to price changes.
• B) the lower the price of the good.
• C) the fewer the number of good substitutes.
• D) the less the essential nature of the good.

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Definitions:

Asymmetric Information

A condition in which one party in a transaction has more or superior information compared to another, potentially leading to an imbalance in the transaction.

Buyer

An individual or entity that purchases goods or services from another entity, typically in the context of an economic market.

Seller

An individual or business that offers goods or services for sale to consumers or other businesses.

Lemons Problem

A phenomenon where the presence of information asymmetry in a market leads to low-quality products being sold, as sellers have more information about the product than buyers.