Other Things Constant, the Price Elasticity of Demand for a Product

question 83

Multiple Choice

Other things constant, the price elasticity of demand for a product will tend to be smaller (more inelastic) if

• A) people spend a large share of their income on the product.
• B) people spend an insignificant share of their income on the product.
• C) the population in the market area is large.
• D) there are many good substitutes for the product.

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Definitions:

Uniformly Distributed

Uniformly distributed indicates that all outcomes in a data set or probability distribution have the same or nearly equal chance of occurring.

Standard Deviation

A tool to determine the degree of difference or dispersion within a batch of data.

Standard Normal

A type of normal distribution with a mean of 0 and a standard deviation of 1.

Random Variable

A numerical value variable resulting from random phenomena.