According to a study of the U.S.demand for alcoholic beverages, the price elasticity of demand for beer is -0.30.Which of the following could explain why the price elasticity of demand for beer is low?
A)Beer is an inferior alcoholic beverage.
B)More and more people are switching to wine and cocktails rather than beer.
C)The price of beer is relatively low and for many people it is a habit forming product.
D)There are only a few major suppliers of beer.

Question

Quizplus · Accepted Answer

The low price elasticity of demand for beer could be explained by the fact that it is a habit forming product for many people and the price is relatively low compared to other alcoholic beverages. This means that consumers are less likely to change their consumption behavior in response to a price change.

According to a Study of the U