Scenario 13-1. Merle is considering purchasing a new lawn mower. He wants a mower that is self-propelled, has a higher horsepower rating, and a high level of quality instilled in the workmanship. Merle begins his search by looking in the yellow pages of the local phone book. Several small lawn mower dealers are listed along with several big-name wholesalers such as Walmart. Merle is not sure where to begin.
-In Scenario 13-1, if Merle saw that the price of lawn mowers had risen by 10 percent, but the overall sales volume of lawn mowers at local dealerships had fallen by only 1 percent, Merle could say that the demand for lawn mowers is ______.

Question

Quizplus · Accepted Answer

The demand for lawn mowers is price inelastic because a significant price increase (10 percent) resulted in only a small decrease in sales volume (1 percent), indicating that consumers' purchasing behavior is not highly sensitive to price changes in this case.