Asked by Brittany Tomlinson on Sep 24, 2024
Verified
Lipitor,a heart medication with few substitutes,should have an own-price elasticity of demand that is:
A) Relative elastic
B) Relatively inelastic
C) Perfectly inelastic
D) Perfectly elastic
Own-Price Elasticity
A measure of the responsiveness of the demand for a good to a change in its own price.
Lipitor
A pharmaceutical drug used to lower cholesterol and reduce the risk of heart disease.
Few Substitutes
A market condition where there are limited alternative products or services available to consumers.
- Master the concept of elasticity of demand and how it reflects on pricing strategies and consumer behavior.
Verified Answer
FF
Fatima Fauzbeen1 day ago
Final Answer :
B
Explanation :
Since Lipitor has very few substitutes, it is likely that its own-price elasticity of demand is relatively inelastic. This means that a change in price would lead to a relatively smaller change in the quantity demanded, as consumers may have limited options in choosing an alternative medication.
Learning Objectives
- Master the concept of elasticity of demand and how it reflects on pricing strategies and consumer behavior.