If a product has an inelastic demand, then
A) there is probably a long time period under consideration.
B) as price increases, total revenue to producers decreases.
C) an increase in the price will decrease total consumer expenditures.
D) there are probably lots of substitutes.
E) there are probably few substitutes.

Question

Quizplus · Accepted Answer

Inelastic demand means that the quantity of the product demanded by consumers does not change significantly in response to changes in price. This suggests that there are probably few substitutes available for the product, as consumers are not easily able to switch to other options if the price increases. Thus, the correct choice is E - there are probably few substitutes.

If a Product Has an Inelastic Demand, Then