Which of the Following Statements Is True of Price Elasticity

question 89

Multiple Choice

Which of the following statements is true of price elasticity?

• A) Elastic products have few substitutes and price changes make little difference in demand.
• B) Inelastic products have many substitutes and price changes lower demand.
• C) Elasticity is the idea that the market's demand for a product or service is sensitive to changes in its price.
• D) Gas for your car is an example of an elastic product.

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Definitions:

Customers Served

The number of individual clients or consumer accounts that a business has provided with goods or services.

Capital Costs

Expenses incurred in acquiring or upgrading physical assets such as buildings and machinery.

Labor-Intensive

Describing a process or industry that requires a large amount of labor to produce its goods or services.

Marginal Product

The additional output generated by employing one more unit of a specific input, while holding other inputs constant.