Question

Christoff's lawn & lot is a small business that provides landscaping and grass cutting services in the spring and summer. christoff's usually contracts with customers on an annual basis, with the terms set out at the beginning of the season. this year, the area experienced a significant amount of rain, causing the grass to grow more quickly. christoff's was required to cut the grass every time it grew 2 inches, and no matter how many times it needed cutting, the customer paid the same monthly amount based on the original contract. the price of gas has now grown by 35% causing christoff's to pay more for their supplies. the demand for gas despite its price represents ________ demand for christoff's lawn & lot. a. separate b. joint c. elastic d. derived e. inelastic

Answer 1

The demand for gas despite its price represents inelastic demand for Christoff's Lawn & Lot. Inelastic demand denotes the demand for a product which does not increase or decrease correspondingly with a fall or rise in its price. The fact that no matter how many times it needed cutting, the customer paid the same monthly amount based on the original contract is example of inelastic demand.