After reading the chapter on elasticity, which of the following statements do you know Is not true?
A) Price elasticity of demand for basic foods is low.
B) When price elasticity of demand is very high, the seller can raise price with confidence knowing that only a few buyers will leave the market.
C) The availability of close substitutes affects the elasticity of demand for a good.
D) Goods that are low priced usually have price elasticities of demand that are low as well.
E) Elasticities increase as the price of the good increases.

Question

Quizplus · Accepted Answer

When price elasticity of demand is very high, it means demand is elastic, and consumers are very responsive to price changes. Therefore, raising prices would likely lead to a significant decrease in quantity demanded, not just a few buyers leaving the market.

After Reading the Chapter on Elasticity, Which of the Following