Price elasticity of demand is determined by a number of factors,such as the necessity of the product or service,the cash outlay of purchase relative to a person's disposable income,and
A)the stage of the product or service in its product life cycle.
B)the degree of carrying costs for the manufacturer or distributor.
C)the availability of substitutes.
D)the financial resources of the organization itself.
E)the ability of the organization to meet sudden increases in demand.

Question

Quizplus · Accepted Answer

The availability of substitutes is one of the key factors that affects the price elasticity of demand. If there are many substitutes available for a product, consumers are more likely to switch to a different product if the price of the original product increases, making the demand for the original product more elastic. On the other hand, if there are few substitutes available, consumers may be willing to pay more for the product, making the demand for the product more inelastic. The other choices listed may be important factors for other aspects of the business, but they do not directly impact price elasticity of demand.

Price Elasticity of Demand Is Determined by a Number of Factors,such