Economics Multiple Choice Question – 13 December 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Economics

Demand for a product is more likely to be price elastic if?

Select ONE answer:

  1. It is heavily branded
  2. There are few substitutes
  3. It is patented
  4. There are many similar products
  5. It is heavily differentiated

Explain with a real-life example what is meant by a price-elastic product:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Economics KS5 classes.

The answer is 4 – A number of factors come into play in determining whether demand is price elastic or price inelastic in a given market. Factors affecting price elasticity of demand include the number of close substitutes; the cost of switching between products; the degree of necessity or whether the good is a luxury; the proportion of a consumer’s income allocated to spending on the good; the time period allowed following a price change – demand is more price elastic, the longer that consumers have to respond to a price change; whether the good is subject to habitual consumption; peak and off-peak demand; and the breadth of definition of a good or service. With many similar products, there is no protection for the product against being switched to another competing product.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s