Which situation best illustrates the concept of inelastic demand for a product?A.A watch company raises its prices after a celebrity is seen wearing one of its products.B.A restaurant begins to see fewer customers each month after raising its prices.C.A gas station is forced to quickly raise gas prices when oil gets more expensive.D.A store always sells the same amount of milk each month regardless of the price.
Question
Which situation best illustrates the concept of inelastic demand for a product?A.A watch company raises its prices after a celebrity is seen wearing one of its products.B.A restaurant begins to see fewer customers each month after raising its prices.C.A gas station is forced to quickly raise gas prices when oil gets more expensive.D.A store always sells the same amount of milk each month regardless of the price.
Solution
The situation that best illustrates the concept of inelastic demand for a product is C. A gas station is forced to quickly raise gas prices when oil gets more expensive.
Inelastic demand refers to a situation where the demand for a product does not change significantly with changes in price. In this case, even if the price of gas increases, people still need to buy it because it's a necessity for most people to run their vehicles. Therefore, the demand is relatively constant, or inelastic, regardless of the price.
Similar Questions
Which situation best illustrates the concept of elastic demand for a product?A.A restaurant begins to see fewer customers each month after raising its prices.B.A watch company raises its prices after a celebrity is seen wearing one of its products.C.A store always sells the same amount of milk each month regardless of the price.D.A gas station is forced to quickly raise gas prices when oil gets more expensive.
An inelastic demand means thata.the change in quantity demanded is equal to the change in price.b.consumers respond directly to a change in income.c.consumers hardly respond to a change in price.d.consumers respond substantially to a change in price.
Demand is said to be inelastic when:A. the percentage change in quantity demanded is greater than the percentage change in price of a goodB. in a linear demand curve, quantity demanded is close to zero (given the price) so that the percentage change in quantity demanded will be very highC. the percentage change in price exceeds the percentage change in quantity demanded of a goodD. a relatively small change in price results in a relatively big change in quantity demanded
Demand is inelastic ifMultiple Choicethe quantity demanded changes more or less proportionately with the price.the quantity demanded does not change very much even if the price changes dramatically.the demand curve is bowed inward towards the origin.the demand curve is bowed outward away from the origin.
Question 9 of 10An example of a good or service that probably has a highly inelastic demand curve is:A.a new sweater.B.a sports car.C.a CD.D.a pair of designer jeans.E.an operation, such as an appendectomy.
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