When customers face significant switching costs,the
A) demand for the existing product becomes more inelastic.
B) supply for the existing product becomes more inelastic.
C) demand for the existing product is perfectly inelastic.
D) supply for the existing product is perfectly inelastic.
E) demand for the existing product becomes neither perfectly elastic nor perfectly inelastic.

Question

Quizplus · Accepted Answer

When customers face significant switching costs, they become more reluctant to switch to a different product, making the demand for the existing product more inelastic. In other words, customers are less sensitive to changes in the product's price because of the high costs they would incur if they were to switch to an alternative product.

When Customers Face Significant Switching Costs,the