The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1

-The value of price elasticity of demand is more likely to be above 1 if:
A)consumers have a long time to adjust to a price change.
B)the product is a necessity.
C)demand is inelastic.
D)there are few close substitutes for the product.
E)total revenue declines in response to a price reduction.

Question

The figure given below shows the demand curves for five products: A, B, C, D, and E.Figure 6.1
 
-The value of price elasticity of demand is more likely to be above 1 if:
A)consumers have a long time to adjust to a price change. 
B)the product is a necessity. 
C)demand is inelastic. 
D)there are few close substitutes for the product. 
E)total revenue declines in response to a price reduction.

Quizplus · Accepted Answer

When consumers have a long time to adjust to a price change, they are more likely to find substitutes or change their consumption habits, making the demand for a product more elastic (elasticity greater than 1).

The Figure Given Below Shows the Demand Curves for Five