Asked by Mollie Weber on Jun 04, 2024
Verified
Which of the following has the highest elasticity of demand?
A) Medical care
B) Telephone services
C) Bread
D) Household electricity
E) Restaurant meals
Telephone Services
The provision of telecommunication facilities enabling voice communication over distances.
Elasticity of Demand
A measure of how much the quantity demanded of a good changes in response to a change in its price.
Restaurant Meals
Food and beverage items prepared and served by dining establishments to customers, typically consumed on premises.
- Contrast elastic demand with inelastic demand.
- Differentiate the properties of goods that have elastic demand from those with inelastic demand.
Verified Answer
ZK
Zybrea KnightJun 04, 2024
Final Answer :
E
Explanation :
Restaurant meals typically have the highest elasticity of demand among the options given. This is because there are many substitutes for restaurant meals (such as cooking at home, fast food, etc.), and consumers are more likely to change their consumption based on price changes compared to necessities like medical care, telephone services, bread, and household electricity, which have fewer substitutes and are more essential.
Learning Objectives
- Contrast elastic demand with inelastic demand.
- Differentiate the properties of goods that have elastic demand from those with inelastic demand.