The More Narrowly a Product Is Defined, the Less Elastic

question 236

True/False

The more narrowly a product is defined, the less elastic the demand for that product will be.

---

Definitions:

Disposable Income

Households' budget for spending and savings after the necessary income taxes have been deducted.

Induced Consumption

Consumer spending that increases as disposable income rises, and decreases as income falls.

Disposable Income

Net resources for spending and saving available to households after subtracting income taxes.

MPC

MPC, or Marginal Propensity to Consume, is the proportion of additional income that an individual spends on consumption.