QQuestionEconomics
QuestionEconomics
Goods that are considered to be needs tend to be:
A. Elastic when the price changes.
B. Inelastic when the price changes.
C. Elastic when the supply changes.
D. Inelastic when the supply changes.
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Answer
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Step 1Let's solve this economics problem step by step:
Step 2: Understanding Price Elasticity of Demand
Price elasticity of demand measures how sensitive consumer demand is to changes in price. Goods are classified as elastic or inelastic based on how much their quantity demanded changes when price changes.
Final Answer
Needs are inelastic when the price changes. Key Concept: Elasticity = \frac{Percentage~Change~in~Quantity~Demanded}{Percentage~Change~in~Price} - If |Elasticity| < 1, the good is inelastic - Needs typically have an elasticity close to zero, meaning demand is highly inelastic
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