Lanover Manufacturing supplies windshield wiper blades to General Motors and Ford.A sudden jump in the price of rubber and its substitutes has forced Lanover and other wiper blades manufacturers to double the price of the wiper blades.Sales volume for wiper blades has not been affected by this increase in price.Why did the price not change?

Question

Quizplus · Accepted Answer

The fact that the sales volume for wiper blades has not been affected by the increase in price suggests that the demand for wiper blades is inelastic. In other words, consumers are willing to pay the higher price for wiper blades because they are either necessary or difficult to substitute. If demand were more elastic, a price increase would likely result in a decrease in sales volume.

Lanover Manufacturing Supplies Windshield Wiper Blades to General Motors and Ford.A