According to a study of the U.S.demand for alcoholic beverages,the price elasticity of demand for beer is -0.23.Which of the following could explain why the price elasticity of demand for beer is low?
A) Beer is an inferior alcoholic beverage.
B) More and more people are switching to wine and cocktails rather than beer.
C) The price of beer is relatively low and for many people it is a habit forming product.
D) There are only a few major suppliers of beer.

Question

Quizplus · Accepted Answer

The low price elasticity of demand for beer can be explained by the fact that its price is relatively low and it is a habit forming product for many people. This means that even if the price of beer increases, consumers will still continue to purchase it due to their loyalty to the product and the fact that it is relatively inexpensive compared to other alcoholic beverages.

According to a Study of the U