Most People, When Asked, Cannot Name the Price of a Canister

question 103

Multiple Choice

Most people, when asked, cannot name the price of a canister of table salt at the grocery store within a factor of 25 percent. Which elasticity argument explains why?

• A) Table salt has many substitutes; demand is highly elastic.
• B) Expenditures on table salt make up a tiny fraction of the average person's budget; demand is highly inelastic.
• C) Most people make their salt consumption decisions in the short run.
• D) People are loyal to their specific brands of salt.

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