A good tends to have a small price elasticity of demand if a. the good is a necessity. b. there are many close substitutes. c. the market is narrowly defined. d. the long-run respo... A good tends to have a small price elasticity of demand if a. the good is a necessity. b. there are many close substitutes. c. the market is narrowly defined. d. the long-run response is being measured. An increase in a good’s price reduces the total amount consumers spend on the good if the _________ elasticity of demand is _________ than one. a. income; less b. income; greater c. price; less d. price; greater A linear, downward-sloping demand curve is a. inelastic. b. unit elastic. c. elastic. d. inelastic at some points, and elastic at others. 4. the citizens of Lilliput spend a higher fraction of their income on food than do the citizens of Brobdingnag. The reason could be that a. Lilliput has lower food prices, and the price elasticity of demand is zero. b. Lilliput has lower food prices, and the price elasticity of demand is 0.5. c. Lilliput has lower income, and the income elasticity of demand is 0.5. d. Lilliput has lower income, and the income elasticity of demand is 1.5.
Understand the Problem
The question is a series of multiple-choice questions related to the concepts of price elasticity of demand and its implications on consumer behavior and economics.
Answer
The good is a necessity.
The final answer is the good is a necessity.
Answer for screen readers
The final answer is the good is a necessity.
More Information
Goods considered necessities tend to have inelastic demand because consumers will continue to buy them even when the price changes.
Tips
Mistakenly thinking that a market with many substitutes or a narrowly defined market will have inelastic demand. These usually make demand more elastic.
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