Which of the Following is demand likely to be least sensitive to price increases?

For Which of the Following is demand likely to be least sensitive to price increases?

There are several factors that can influence the sensitivity of demand to price increases, but typically goods or services that are considered necessities or have few close substitutes tend to have less elastic demand. Therefore, demand is likely to be least sensitive to price increases for:

1. Basic food items such as bread, milk, or eggs

2. Prescription medications or medical treatments

3. Utilities like water, gas, or electricity

4. Gasoline or other transportation fuels

5. Tobacco products

6. Basic clothing items like underwear or socks

7. Housing rentals or mortgages in areas with limited available housing options.

In this lesson, you started by reviewing customer demand before choosing a business. what microeconomic factors point to the fact that your business should be successful? be sure to provide evidence for your claim.

There are several microeconomic factors that can help predict the potential success of a business based on customer demand. These include:

1. Market size: The size of the market for a particular product or service can indicate the potential demand. A larger market suggests a higher demand and potential for success. For example, the global e-commerce market size was valued at $9.09 trillion in 2019 and is projected to reach $17.5 trillion by 2026, indicating a high demand for online shopping.

2. Consumer behavior: Analyzing consumer behavior can help predict demand for a particular product or service. For example, the rising trend of health-conscious consumers has led to an increase in demand for organic and natural products.

3. Competition: Studying the competition can help determine the demand for a particular product or service. If there are few competitors in a market, it suggests there may be high demand. Conversely, if the market is already saturated with competitors, it may be difficult to gain traction.

4. Price sensitivity: Examining price sensitivity can help determine the demand level for a particular product or service. If consumers are willing to pay a premium price for a particular product or service, it suggests high demand. For example, the demand for luxury cars indicates a price-insensitive consumer base.

Overall, analyzing these microeconomic factors can help predict the potential demand and success of a business. However, it is important to also consider macroeconomic factors, such as economic growth and government regulations, when making business decisions.