A person's sensitivity to a price change for a good, such as breakfast cereal, depends on all of the following except the
A) price of the good
B) cost of producing the good
C) person's income
D) availability and closeness of substitutes
E) time the person has to adjust to the price change

Question

Quizplus · Accepted Answer

The cost of producing the good does not directly affect a consumer's sensitivity (elasticity of demand) to a price change for a product. Sensitivity to price changes is influenced by factors like the price of the good itself, the consumer's income, the availability of substitutes, and the time available for adjustment, but not the production costs from the consumer's perspective.

A Person's Sensitivity to a Price Change for a Good