Explain how fluctuating demand impacts business markets differently from consumer markets.

Question

Quizplus · Accepted Answer

The Answer is The demand for business goods and services tends to be more volatile than the demand for consumer goods and services. A given percentage increase in consumer demand can lead to a much larger percentage increase in the demand for plant and equipment necessary to produce additional output. Economists refer to this as the acceleration effect.

Explain How Fluctuating Demand Impacts Business Markets Differently from Consumer