The demand for which of the following is likely to be the most price inelastic ?
Correct answer: A. transportation
- A. transportation
- B. taxi rides
- C. bus tickets
- D. airline tickets
Explanation
Transportation is a broad necessity with relatively few practical substitutes, so its demand is likely to respond least to price changes. Taxi rides, bus tickets, and airline tickets are narrower services with more substitution possibilities.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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