Christoff's Lawn & Lot is a small business that provides landscaping and lawnmowing services in the spring and summer. Christoff's usually contracts with customers on an annual basis, with the terms set out at the beginning of the season. This year the area experienced a significant amount of rain, causing the grass to grow more quickly. Christoff's was required to cut the grass every time it grew 2 inches, and no matter how many times it needed cutting, the customer paid the same monthly amount based on the original contract. The price of gas has now grown by 35%, causing Christoff's to pay more for their supplies. The demand for gas despite its price represents ________ demand for Christoff's Lawn & Lot.

Question

Quizplus · Accepted Answer

The demand for Christoff's services is likely to be inelastic because the customers are contracted to pay a fixed monthly rate, regardless of how many times their lawn is mowed. This means that even if the price of the service increases due to the cost of gas, customers may continue to use Christoff's services because they are locked into a contract and may not seek out alternatives.

Christoff's Lawn & Lot Is a Small Business That Provides