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JAMB Economics 1989 Question 13

Question 13

Elasticity

Which of the following factors is an important determinant of the magnitude of price elasticity of demand?

  1. A.The production period
  2. B.Cost of storage
  3. C.Durability of the product
  4. D.Availability of factors of production.
Show the answer and explanation

Answer: C (Durability of the product)

Explanation

Purchases of durable goods can be postponed when their price rises, so durability affects how strongly demand responds to price. The other options affect supply.