6
QuizMultiple Choice

Elasticity and Incentives

Question 6 • 2102320-Economics HONORS - Edgenuity Teacher

Which statement best explains how elasticity and incentives work together?

Answer
A
An elastic good, such as a game, is more likely to respond to incentives.
B
An inelastic good, such as a game, is more likely to respond to incentives.
C
An elastic good, such as a game, is less likely to respond to incentives.
D
An inelastic good, such as a game, is less likely to respond to incentives.

Explanation

Elasticity measures how strongly quantity demanded responds to a change in price or another factor. Because demand for an elastic good changes more when incentives change, an elastic good such as a game is more likely to respond to incentives. Inelastic goods tend to show a smaller response.

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