If the price of business broadband is greater than that of residential broadband,all else equal,
A) business has greater price elasticity than residential.
B) residential has greater price elasticity than business.
C) both have positive income elasticity.
D) generally speaking, broadband is equally priced.

Question

Quizplus · Accepted Answer

Residential broadband has a relatively higher price elasticity compared to business broadband because residential customers are more price-sensitive than business customers. As a result, they are more likely to switch to providers who offer lower-priced options. This means that if the price for residential broadband increases, customers are more likely to look for cheaper alternatives, while business customers are less likely to do so, making them less price-sensitive compared to residential customers.

If the Price of Business Broadband Is Greater Than That