ECONOMICS
ELASTICITY OF DEMAND
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
availability of substitutes
|
|
|
consumer’s budget to spend on goods and services
|
|
|
duration of adjustment period
|
|
|
government spending
|
Detailed explanation-1: -Answer and Explanation: Supply is not a determinant of price elasticity of demand as it does not concern the producers’ willingness to produce output but rather the consumers’ willingness to purchase outputs at a given price level.
Detailed explanation-2: -The four factors that affect price elasticity of demand are (1) availability of substitutes, (2) if the good is a luxury or a necessity, (3) the proportion of income spent on the good, and (4) how much time has elapsed since the time the price changed.
Detailed explanation-3: -Many factors determine the demand elasticity for a product, including price levels, the type of product or service, income levels, and the availability of any potential substitutes. High-priced products often are highly elastic because, if prices fall, consumers are likely to buy at a lower price.
Detailed explanation-4: -Answer and Explanation: The correct option is A) The quantity of the good that is supplied to the market. The quantity of the good that is being supplied has no effect on the price elasticity of demand for the product.