Justin's Lawn & Lot is a small business that provides landscaping and lawn-mowing services in the spring and summer. Justin's usually contracts with customers on an annual basis, with the terms set out at the beginning of the season. This year, the area experienced a significant amount of rain, causing the grass to grow more quickly. Justin's was required to cut the grass every time it grew 2 inches, and no matter how many times it needed cutting, the customer paid the same monthly amount based on the original contract. The price of gas has now grown by 35%, causing Justin's to pay more for their supplies. The demand for gas despite its price represents ________ demand for Justin's Lawn & Lot.

Question

Quizplus · Accepted Answer

The fact that the customer pays the same monthly amount regardless of how many times the grass needs cutting suggests that the demand for Justin's services is inelastic. Additionally, the increase in the cost of gas may affect Justin's profitability, but it is unlikely to significantly reduce demand for their services.

Justin's Lawn & Lot Is a Small Business That Provides