The more elastic the demand for a final product,
A) the more elastic will be the demand for the productive resources used.
B) the less elastic the supply of resources used in producing the product.
C) the less firms will reduce their usage of resources when the price of the resources increases.
D) the higher the MRP of the resources used to produce the product.

Question

Quizplus · Accepted Answer

If the demand for a final product is more elastic, consumers will be more likely to change their consumption patterns in response to changes in the product's price. This means that firms will also be more likely to reduce their prices, and thus their demand for the productive resources used to make the product. As a result, the demand for productive resources will be more elastic as well.

The More Elastic the Demand for a Final Product