Which of the following is not characteristic of a product with relatively inelastic demand?
A) The good is regarded by consumers as a necessity.
B) There are a large number of good substitutes for the good.
C) Buyers spend a small percentage of their total income on the product.
D) Consumers have had only a short time period to adjust to changes in price.

Question

Quizplus · Accepted Answer

A product with relatively inelastic demand is one where changes in price have little effect on the quantity demanded by consumers. This is typically the case when the good is regarded as a necessity by consumers, when buyers spend a small percentage of their total income on the product, and when consumers have had only a short time period to adjust to changes in price. However, if there are a large number of good substitutes for the product, then consumers can easily switch to another product if the price of the original product increases, indicating a more elastic demand.

Which of the Following Is Not Characteristic of a Product