Which of the following would result in a higher absolute value of the price elasticity of demand for a product?
A) A wide variety of substitutes are available for the good.
B) The time period under consideration is short.
C) The good is a necessity.
D) The expenditure on the good is small relative to one's budget.
If the price of steel increases drastically, the quantity of steel demanded by the building industry will fall significantly over the long run because
A) buyers of steel are more sensitive to a price change if they have more time to adjust to the price change.
B) buyers of steel are less sensitive to a price change if they have more time to adjust to the price change
C) sales revenue in the building industry will fall sharply.
D) profits will fall by a greater amount in the long run than in the short run.
The demand for all carbonated beverages is likely to be ________ the demand for Dr. Pepper.
A) more elastic than
B) perfectly elastic compared to
C) less elastic than
D) perfectly inelastic compared to
Which of the following products comes closest to having a perfectly inelastic demand?
A) gasoline
B) cholesterol medication in general
C) iPhones
D) bus rides
When there few close substitutes available for a good, demand tends to be
A) perfectly inelastic.
B) perfectly elastic.
C) relatively inelastic.
D) relatively elastic.
A demand curve that is horizontal indicates that the commodity
A) has few substitutes.
B) must be very cheap.
C) is a necessity.
D) has a large number of substitutes.