Which of the following is a determinant of price elasticity of demand for good Z?
A)the number of substitutes for good Z
B)the percentage of one's budget spent on good Z
C)the amount of time that has passed since the price of good Z has changed
D)b and c
E)all of the above

Question

Quizplus · Accepted Answer

All of the listed options are determinants of the price elasticity of demand for a good. The number of substitutes affects how easily consumers can switch to another product if the price of good Z changes. The percentage of one's budget spent on good Z influences how sensitive consumers are to price changes; if they spend a significant portion of their budget on the good, they are likely to be more sensitive to price changes. The amount of time that has passed since the price change allows consumers more time to adjust their consumption habits, affecting the elasticity of demand.

Which of the Following Is a Determinant of Price Elasticity