Higher quality is equivalent to lower elasticity.

Question

Quizplus · Accepted Answer

This statement is generally true. Higher quality products are often less elastic because consumers are willing to pay more for higher quality goods and are less likely to switch to a lower quality substitute if the price of the higher quality product increases. In contrast, lower quality products are typically more elastic because consumers may be more price sensitive and willing to switch to a cheaper substitute if the price of the lower quality product increases. However, there may be exceptions to this general rule depending on the specific product and market dynamics.

Higher Quality Is Equivalent to Lower Elasticity