The cost of producing a hardback book is only about 20 percent higher than producing a paperback book, yet the hardback price is typically three times the paperback price. This suggests that demand for paperback books is ________ than demand for hardback books.
A) more elastic
B) less elastic
C) more variable
D) lower

Question

Quizplus · Accepted Answer

The fact that the price of hardcover books is three times that of paperbacks, despite the only 20 percent difference in production cost, suggests that the demand for hardcover books is less elastic (i.e. more price inelastic) than the demand for paperbacks. This means that consumers are willing to pay a higher price for hardcovers than they are for paperbacks, which suggests that the demand for hardcovers is less responsive to changes in price. Therefore, the demand for paperbacks is more elastic than the demand for hardcovers.

The Cost of Producing a Hardback Book Is Only About