Asked by Terrance Guvakuva on Jul 12, 2024
Verified
The demand for a necessity whose cost is a small portion of one's total income is
A) perfectly price inelastic.
B) perfectly price elastic.
C) relatively price inelastic.
D) relatively price elastic.
Price Inelastic
Describes a situation where the demand for a good is not very responsive to price changes, meaning consumers buy roughly the same amount regardless of price fluctuations.
Necessity
An essential good or service required for basic survival or societal functioning.
- Decode the differences in market reactions under elastic and inelastic demand and supply conditions.
- Implement the theory of elasticity to analyze the reaction of consumers to alterations in prices.
Verified Answer
KD
Katelyn DeLoyeJul 13, 2024
Final Answer :
C
Explanation :
The demand for a necessity, especially one that constitutes a small portion of one's total income, tends to be relatively price inelastic. This means that changes in price have a smaller effect on the quantity demanded, as consumers will continue to purchase these goods even if the price increases, due to their essential nature.
Learning Objectives
- Decode the differences in market reactions under elastic and inelastic demand and supply conditions.
- Implement the theory of elasticity to analyze the reaction of consumers to alterations in prices.