The demand in the business market for fabricating parts and materials is inelastic because:
A) as prices increase, demand increase only slightly.
B) most business users operate in an oligopolistic market.
C) ordinarily the cost of a single part or material is a small portion of the total cost of the finished product.
D) as prices decrease, demand also decreases.
E) demand changes only when there is a price increase and is unaffected by a price decrease.

Question

Quizplus · Accepted Answer

Inelastic demand in the business market often occurs because the cost of a single part or material is typically a small portion of the total cost of the finished product, making businesses less sensitive to price changes for those parts or materials.

The Demand in the Business Market for Fabricating Parts and Materials