Which would make an individual firm's demand curve less elastic?
A) The purchase of more efficient machinery
B) A reduction in the price of the firm's product
C) Increased brand loyalty toward the firm's product
D) A reduction in advertising expenditures by the firm

Question

Quizplus · Accepted Answer

Increased brand loyalty toward the firm's product makes the demand curve less elastic because consumers are more willing to pay for the product even if the price increases, thereby reducing the price sensitivity of demand. This means that the firm can increase the price without causing a significant decrease in the quantity demanded, effectively reducing the elasticity of demand for the firm's product.

Which Would Make an Individual Firm's Demand Curve Less Elastic