Price elasticity of demand is determined by a number of factors such as whether the item is a luxury product or service,the availability of substitutes,the cash outlay of purchase relative to a person's disposable income,and
A) the stage of the product or service in its product life cycle.
B) the degree of carrying costs for the manufacturer or distributor.
C) the financial resources of the organization itself.
D) the ability of the organization to meet sudden increases in demand.
E) the necessity of the product or service.

Question

Quizplus · Accepted Answer

The necessity of the product or service affects price elasticity because essential goods tend to have inelastic demand, meaning consumers will buy them regardless of price changes.

Price Elasticity of Demand Is Determined by a Number of Factors