Question

Determine which statement about the absolute value of the price elasticity of demand is correct. The price elasticity of demand for gasoline is greater than the price elasticity of demand for cereal because because more people eat cereal than use gasoline. The price elasticity of demand for Gain laundry detergent is likely to be greater than the price elasticity of demand for laundry detergent in general. The price elasticity of demand for laundry detergent in general is likely to be greater than the price elasticity of demand for Gain laundry detergent. The price elasticity of demand for gasoline is less than the price elasticity of demand for cereal because because more people eat cereal than use gasoline.

Answer 1

Answer: Option (b) is correct.

Explanation:

Correct option : The price elasticity of demand for Gain laundry detergent is likely to be greater than the price elasticity of demand for laundry detergent in general.

People are definitely using laundry detergent for doing laundry but when we are talking about a particular detergent, then are many substitutes available to do the laundry. Hence, the price elasticity of demand for the Gain laundry detergent is generally higher than for the laundry detergent in general.

Therefore, correct option is part (b).