Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 5 - Part II - Elasticity and its Application - Quick Check Multiple Choice: 1

Answer

a. a small elasticity of demand

Work Step by Step

If the life-saving medicine has no close substitutes, it will have a very inelastic demand. Those who depend on this medicine to survive will be willing to buy the medicine at almost any price. Therefore, a change in price will result in a change in quantity demanded of the good that is much smaller in magnitude.
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