Reading Comprehension: Application Questions
Which of the following products would not be affected by the link the author suggests between duration of price change and elasticity of demand?
Good work!
[[snippet]]Substitutions are not available for a product which has a monopoly on the market, and therefore this product would not be affected by an increase in price of any duration, because no alternatives are available.
Incorrect.
[[snippet]]This answer choice presumes that wealthy people are willing to pay any price for a luxury item, which is not necessarily the case.
Incorrect.
[[snippet]]The product in this answer choice may have been affordable despite its high price before the price increased; however, this does not mean that it remained affordable once the price increased. According to the passage, as time goes by consumers would move to substitutions.
Incorrect.
[[snippet]]The demand for a high quality product can still be affected by a long-term increase in price.
Incorrect.
[[snippet]]Just because the product is the only one available at a certain point, substitutions can still appear after the price increases.
