Asked by Monish Messi on Sep 24, 2024
Verified
The demand for a product is more inelastic
A) When it has many close substitutes
B) In the long-run
C) When it has many complements
D) None of the above
Inelastic Demand
A situation in which the demand for a product does not change much in response to price changes.
Close Substitutes
Products that serve similar functions or needs and can easily replace one another in the eyes of the consumer.
Complements
Products or services that are used together, such that the demand for one increases the demand for the other.
- Acquire knowledge about the factors that affect the elasticity of demand.
Verified Answer
KV
Kayla Vasheyabout 8 hours ago
Final Answer :
C
Explanation :
When a product has many complements, it means that it is often purchased along with other products. For example, if the price of coffee increases, the demand for cream and sugar, which are complements, may also decrease. This means that even if the price of coffee increases, customers still purchase it along with its complements, making the demand for coffee more inelastic.
Learning Objectives
- Acquire knowledge about the factors that affect the elasticity of demand.