A lower price elasticity of demand coefficient occurs when:
A) the good has less substitutes.
B) the fall in price is fully compensated by an increase in quantity.
C) the fall in price causes the total revenue to increase.
D) there is a strong competition among producers.

Question

Quizplus · Accepted Answer

A lower price elasticity of demand indicates that the quantity demanded is less responsive to price changes. This is more likely when the good has fewer substitutes, as consumers have fewer alternatives to switch to if the price of the good changes.

A Lower Price Elasticity of Demand Coefficient Occurs When