Consumers Will Bear the Costs of Switching Technologies If

question 2

Multiple Choice

Consumers will bear the costs of switching technologies if:

• A) the benefits of adopting the new technology outweigh the costs of switching.
• B) switching costs are substantial.
• C) the new products are packaged attractively.
• D) there is a lack of complementary products.
• E) the new technology is advertised subtly.

---

Definitions:

Income Elasticity

Measures how the demand for a product or service changes in response to changes in consumer income.

Positive Elasticity

Occurs when the demand for a product increases as the price increases, indicating a direct relationship between price and demand.

Inelastic Demand

A situation where the demand for a product does not change significantly with a change in the price of that product.