Which of the following is NOT a determinant of the price elasticity of demand?
A) the availability of potential substitutes
B) the share of the budget spent on the item
C) the time the consumer has to adjust to the price change
D) the cost to produce the product

Question

Quizplus · Accepted Answer

The cost to produce the product is not a determinant of price elasticity of demand. Price elasticity of demand is determined by factors that affect the responsiveness of consumers to a change in price, such as the availability of substitutes, the share of the budget spent on the item, and the time the consumer has to adjust to the price change. The cost to produce the product is a determinant of supply, not demand.

Which of the Following Is NOT a Determinant of the Price