After you graduate from college, you open a business selling computers.Many other businesses in your city sell similar computers.Based on this information, the price elasticity of demand for the computers that your business sells will be:
A)1.
B)0.
C)highly elastic.
D)highly inelastic.

Question

Quizplus · Accepted Answer

Since there are many other businesses in the city selling similar computers, consumers have a lot of options to choose from. This means that if your business were to raise its prices, customers could easily go to competitor businesses. Therefore, the demand for your computers would likely be highly elastic, or responsive to changes in price.

After You Graduate from College, You Open a Business Selling