Which of the following statements is not true?
A) Price elasticity of demand for basic foods is low.
B) When price elasticity of demand is very high, we say there is brand loyalty.
C) The availability and price of substitutes affect the elasticity of demand for a good
Or service.
D) When goods have very low prices, the elasticity of demand is usually quite low.

Question

Quizplus · Accepted Answer

Price elasticity of demand measures how much the quantity demanded of a good responds to a change in the price of that good. It does not measure brand loyalty. High price elasticity indicates that consumers are sensitive to price changes, which can happen for reasons other than brand loyalty, such as the availability of close substitutes. Brand loyalty implies that consumers will stick with their preferred brand even if the price changes, which is not directly related to the concept of price elasticity.

Which of the Following Statements Is Not True