Which of the following is likely to make a market inelastic? When something is perceived as...
- Which of the following is likely to make a market inelastic?
- When something is perceived as a shopping good
- When the product under consideration is radically new innovation
- When a consumer has to bear the entire cost
- When something is perceived as a commodity
- When the market is filled with many similar offerings.
Homework Answers
The market will become inelastic when something is perceived as commodity. Most commodities are essential for human survival, such as food items, water, fuel or electricity. If the item in case is commodity, the consumers would buy it even if its prices go up. However, if the item in case is perceived as luxury item, shopping goods or avoidable purchases the market will not remain elastic and consumers would shun or limit the purchase of such items if their prices go up.
Option D is right
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