Which of the following statements best describes a product that is considered inelastic? a) The product is made of stretchy material

Economics Jan 19, 2021

Which of the following statements best describes a product that is considered inelastic?

a) The product is made of stretchy material.

b) The demand for the product is not affected by an increase in price.

c) The demand for the product is affected by an increase in price.

d) The product is imported by foreign companies.

Expert Solution

Answer: B

The less sensitive demand is to changes in price, the less elastic a good is. This means that if the demand for a product is not affected by an increase in price is call a low elasticity of demand. Having a low elasticity of demand is known as inelastic demand. Thus, the answer is B.

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