객관식
Which of the following is a key determinant of the price elasticity of demand for a good?
132
views
4. Elasticity
Determinants of Price Elasticity of Demand
객관식
What factors determine the price elasticity of demand?
A
Slope of the market demand curve; current equilibrium price; producer expectations; and government price controls.
B
Average consumer income; overall price level in the economy; firms' advertising expenditure; and product packaging and design.
C
Availability of close substitutes; necessity vs luxury; proportion of income spent on the good; time horizon (short-run vs long-run); and how narrowly the market is defined.
D
Cost of production; level of technology; input prices; and taxes and subsidies affecting producers.
검증된 단계별 안내1
Step 1: Understand that the price elasticity of demand measures how much the quantity demanded of a good responds to a change in its price. It is influenced by several key factors related to consumer behavior and market characteristics.
Step 2: Identify the availability of close substitutes. When many close substitutes exist, consumers can easily switch if the price changes, making demand more elastic.
Step 3: Consider whether the good is a necessity or a luxury. Necessities tend to have inelastic demand because consumers need them regardless of price changes, while luxuries have more elastic demand.
Step 4: Examine the proportion of income spent on the good. Goods that take up a larger share of a consumer's income usually have more elastic demand because price changes significantly affect the consumer's budget.
Step 5: Take into account the time horizon and market definition. Demand is usually more elastic in the long run as consumers have more time to adjust their behavior, and demand tends to be more elastic for narrowly defined markets (specific brands) than broadly defined ones (general categories).
관련 영상
관련 실천
