As macroeconomic conditions improve and consumers' incomes and wealth increase,their demand for many products tends to become ________ price inelastic.As such,the ability of firms to mark up price above cost will ________.
A)more; increase
B)more; decrease
C)less; increase
D)less; decrease

Question

Quizplus · Accepted Answer

When macroeconomic conditions improve and consumers' incomes and wealth increase, their demand for many products tends to become more price inelastic because they are less sensitive to price changes. Consequently, the ability of firms to mark up prices above cost will increase, as consumers are willing to pay more without reducing their quantity demanded significantly.

As Macroeconomic Conditions Improve and Consumers' Incomes and Wealth Increase,their