To settle the dispute, you need to ensure that both owners understand the primary differences between consumer transactions and

Question

2 years ago

8

To settle the dispute, you need to ensure that both owners understand the primary differences between consumer transactions and

business transactions. As you work on your explanation, you reflect on the characteristics that make business transactions different than consumer transactions. How would you describe the demand for business products?Select an option from the choices below and click Submit.- Inelastic: Demand for business goods tends to be me more inelastic than demand for consumer goods.- Elastic: Demand for business goods tends to be more elastic than demand for consumer goods.

Business

1 answer:

ASHA 777 [7] · Answer 1 · 2022-03-14T15:24:26+03:00

Answer:

Demand for business goods tends to be me more inelastic than demand for consumer goods

Explanation:

Price elasticity of demand is a measure of the sensitivity of demand for a good or service to changes in the price of that product. We say that the price elasticity of demand is elastic when a percentage change in the price of this good has major impacts on demand. On the contrary, we say that the price elasticity of demand is inelastic when variations in the price of goods have little or no influence on demand.

Elasticity is associated with tastes and the immediate need for consumption by the economic agent. For example, medicines have a more inelastic (less price sensitive) demand because they are essential items. However, in most cases, consumer transactions are opnative for consumers. However, in the case of business transactions, there is usually a need to demand good even though the price is high. As a result, the demand for business transactions is often more inelastic than the demand from ordinary consumers.

For example, imagine the airline ticket market. A consumer travels for leisure and an executive travels for work. If the ticket is expensive, the consumer may give up the trip. This means your demand for travel is elastic (price sensitive). However, the executive has little room to give up business travel and tends to travel even if the price is higher. Therefore, business transactions are more inelastic.