Question

In placing a tire order with Goodyear, River City Industrial Supply finds that the truck tires it is ordering have increased $37.50 in price since the last order. River City proceeds with the order, confident that it can pass on the price increase to future customers. This is an example of business products having ____ demand.

Answer 1

Answer:

Inelastic

Explanation:

Inelastic demand is when the buyer's demand does not change as much as the price changes. When price increases by 20% and demand decreases by only 1%, demand is said to be inelastic.

Inelastic demand in economics is when people buy about the same amount, whether the price drops or rises. This situation happens with things that people must have, like gasoline and food. Drivers must purchase the same amount even when the price increases.

Answer 2

Answer:

The correct answer is b. inelastic .

Explanation:

Considering that inelastic demand occurs when substitute products do not exist or are not available, River City is forced to take the order beyond evidencing a high value compared to other previous purchases. The main behavior to the final consumer is also changing considering that the profitability margin that River City must handle in any way any variation in the prices of its tire supplier.