Question

Which factor does NOT determine the price elasticity of demand?

a)the slope of the supply curve
b)the proportion of the budget spent on the item
c)the time available to adjust to price changes
d)the number of available substitutes

Answer 1

The factor that does NOT determine the price elasticity of demand is the slope of the supply curve. The price elasticity of demand is determined by factors such as the proportion of the budget spent on the item, the time available to adjust to price changes, and the number of available substitutes.

Step-by-step explanation:

The factor that does NOT determine the price elasticity of demand is the slope of the supply curve.

The price elasticity of demand is determined by factors such as the proportion of the budget spent on the item, the time available to adjust to price changes, and the number of available substitutes.

For example, if a product has many available substitutes, consumers have more options and are more likely to be responsive to changes in price, resulting in a higher price elasticity of demand.