Which of the following would not be a characteristic of a good with an elastic demand?
A)The product lacks unique features that differentiate it from competing products
B)The product is a high percentage of a consumer's total expenditures
C)The good is an input used to make a product that is sensitive to changes in price
D)There are many substitutes available for the good
E)The product has high switching costs

Question

Quizplus · Accepted Answer

A good with elastic demand is one where consumers are highly sensitive to changes in price and will decrease their quantity demanded significantly if the price increases. A characteristic that would not be typical of such a good is high switching costs, which would make it less likely for consumers to switch to a substitute in response to a price increase. The other choices - lack of differentiation from competing products, high percentage of consumer expenditures, sensitivity to changes in price of complementary goods, and availability of substitutes - are all characteristics that would contribute to a good having elastic demand.

Which of the Following Would Not Be a Characteristic of a Good