When cars are offered at low prices but people still do not buy them the situation is one in which______________?
Correct answer: B. demand is inelastic
- A. demand is elastic
- B. demand is inelastic
- C. there is aggregate demand
- D. exchange takes place
Explanation
If a substantial price reduction produces little additional buying, quantity demanded responds weakly to price, indicating inelastic demand. Elastic demand would show a relatively large response to the lower price.
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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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