CLEP Microeconomics Exam Prep

Answer - B - How much the particular good costs is not one of the factors that determine whether or not the demand for a particular good is elastic or inelastic in respect to the price.

Key Takeaway: There are four main factors that help to determine whether or not the demand for a particular good is elastic or inelastic in respect to the price: how much of a consumer’s budget is spent on the good, whether the good being bought is a luxury item or a necessity, if close substitutes for the good are available, and the amount of time in which the switch to another good is considered.