Table 5-1

-Refer to Table 5-1.Which of the following is consistent with the elasticities given in Table 5-2?
A) A is a luxury, and B is a necessity.
B) A is a good several years after a price increase, and B is that same good several days after the price increase.
C) A is a Kit Kat bar, and B is candy.
D) A has fewer substitutes than B.

Question

Table 5-1
 
-Refer to Table 5-1.Which of the following is consistent with the elasticities given in Table 5-2?
A) A is a luxury, and B is a necessity. 
B) A is a good several years after a price increase, and B is that same good several days after the price increase. 
C) A is a Kit Kat bar, and B is candy. 
D) A has fewer substitutes than B.

Quizplus · Accepted Answer

The statement in Table 5-2 that A has a lower price elasticity than B indicates that A has fewer substitutes than B. This means that consumers are less likely to switch to other products when the price of A increases, making it less elastic than B. None of the other answer choices are consistent with the elasticities given in Table 5-2.

Table 5-1 -Refer to Table 5-1.Which of the Following Is Consistent with Following