Which is not characteristic of a product with relatively inelastic demand?
A) The good is regarded by consumers as a necessity.
B) There are a large number of good substitutes for the good.
C) Buyers spend a small percentage of their total income on the product.
D) Consumers have had only a short time period to adjust to changes in price.

Question

Quizplus · Accepted Answer

A product with relatively inelastic demand is one where the quantity demanded does not significantly change with changes in price. This is typically observed for goods that are seen as necessities by consumers (A) and where consumers spend a small percentage of their income on the product (C). Additionally, consumers may not have had enough time to adjust to changes in price (D). However, if there are a large number of substitutes for the product (B), then consumers have more options to choose from if the price increases, thus making demand more elastic.

Which Is Not Characteristic of a Product with Relatively Inelastic