Which factor is NOT likely to increase the price elasticity of demand for a particular good? A) The time period considered for the purchase is lengthy. B) The good is highly brande... Which factor is NOT likely to increase the price elasticity of demand for a particular good? A) The time period considered for the purchase is lengthy. B) The good is highly branded and has strong loyalty. C) The good takes a large portion of consumer income. D) There are numerous substitutes available.
Understand the Problem
The question is asking us to identify which of the listed factors would NOT lead to an increase in the price elasticity of demand for a good. Price elasticity of demand measures how much the quantity demanded of a good responds to a change in price. We will analyze each option to determine which one is least likely to increase elasticity.
Answer
The good is highly branded and has strong loyalty.
The good is highly branded and has strong loyalty.
Answer for screen readers
The good is highly branded and has strong loyalty.
More Information
Brand loyalty tends to decrease price elasticity because it makes consumers less sensitive to price changes due to their preference for the brand. The other factors listed generally increase elasticity by making demand more responsive to price changes.
Tips
A common mistake would be confusing the effects of brand loyalty with those of substitute availability. While brand loyalty decreases elasticity, having many substitutes would increase it.
Sources
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