Figure 16-1 Chantal owns a hairdressing salon which caters to two main groups of customers: residents of "The Chateau," a retirement community,and other residents in the neighborhood.Figure 16-1 shows the demand curves for the residents of the retirement community,labeled Market A,and other residents in the neighborhood,labeled Market B.The demand curves are not identical.
-Refer to Figure 16-1.Which group of customers is likely to have a more elastic demand curve (more sensitive to price)?

Question

Figure 16-1  Chantal owns a hairdressing salon which caters to two main groups of customers: residents of "The Chateau," a retirement community,and other residents in the neighborhood.Figure 16-1 shows the demand curves for the residents of the retirement community,labeled Market A,and other residents in the neighborhood,labeled Market B.The demand curves are not identical.
-Refer to Figure 16-1.Which group of customers is likely to have a more elastic demand curve (more sensitive to price)?

Quizplus · Accepted Answer

Customers from "The Chateau" (market A) are likely to have a more elastic demand curve because they may have more options or substitutes available, making them more sensitive to price changes.

Figure 16-1 Chantal Owns a Hairdressing Salon Which Caters