If the price of business broadband is greater than that of residential broadband, all else equal
A)business has greater price elasticity than residential.
B)residential has greater price elasticity than business.
C)both have inelastic demand curves.
D)generally speaking, broadband is equally priced.

Question

Quizplus · Accepted Answer

Residential broadband is likely to have a more elastic demand curve compared to business broadband because households are more price-sensitive than businesses. In other words, the demand for residential broadband is more responsive to changes in price than the demand for business broadband. This is because businesses often require reliable and high-quality internet services to perform critical functions, while households may not have the same level of need. As a result, businesses may be willing to pay a higher price for broadband than households.

If the Price of Business Broadband Is Greater Than That