Question

If the demand for a good is made by a rich consumer, its demand is generally ______.

Options

• Less elastic

• Highly elastic

• Unitary elastic

• Perfectly elastic

Answer 1

If the demand for a good is made by a rich consumer, its demand is generally less elastic.

Explanation:

Rich consumers are generally less affected by price changes, making their demand less elastic. This does not mean demand is necessarily unitary or perfectly elastic.