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Answer true, false, or uncertain, and explain: The demand for food is more elastic than the demand for pizza
Answer true, false, or uncertain, and explain:
The demand for food is more elastic than the demand for pizza.
Expert Solution
Here, we are comparing food and pizza. In order to reach a conclusion, we need to understand the nature of both. Here, food refers to basic necessities and pizza on the other hand is a luxury. Sir Alfred Marshal in his demand analysis states that every consumer is a rational being. Hence, consumption of the necessities will be less affected by fluctuation than consumption of luxury. Thus, we can say the demand for food is less elastic than pizza in such a case.
However, as the question is less specific, uncertain would be the best choice out of the given choices.
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