Figure 16-3

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 16-3 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 16-3.Which group of customers is likely to have a more elastic demand curve (more sensitive to price)?
A)the other residents of the neighborhood-market B
B)There is no difference in the elasticity of demand between the two groups.
C)the customers from "The Chateau"-market A
D)There is insufficient information to answer this question.

Question

Figure 16-3
  
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 16-3 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 16-3.Which group of customers is likely to have a more elastic demand curve (more sensitive to price)?
A)the other residents of the neighborhood-market B 
B)There is no difference in the elasticity of demand between the two groups. 
C)the customers from "The Chateau"-market A 
D)There is insufficient information to answer this question.

Quizplus · Accepted Answer

Customers from "The Chateau" (market A) are likely to have a more elastic demand curve because they may have more alternatives or be more price-sensitive compared to the other residents of the neighborhood (market B).

Figure 16-3 Chantal Owns a Hairdressing Salon Which Caters to Two Main