The Demand for a Good Becomes More Inelastic

question 98

Multiple Choice

The demand for a good becomes more inelastic

• A)as more close substitutes for it become available.
• B)as it is increasingly viewed as a luxury good.
• C)as the market is defined more broadly.
• D)the longer the time horizon.

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Definitions:

Budget Set

The collection of all possible bundles of goods and services that a consumer can afford with their income at given prices.

Prices Doubled

A situation where the cost of goods, services, or commodities increases to twice their original amount.

Relative Prices

The price of one good or service compared to another, usually considered in terms of opportunity cost.

Price Of X

The amount of money required to purchase a unit of product X in a market.