Multiple Choice
Which of the following is NOT a determinant of the price elasticity of demand for a particular good?
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4. Elasticity
Determinants of Price Elasticity of Demand
Multiple Choice
Which of the following is a nonprice determinant of demand?
A
Consumer income
B
Quantity supplied
C
Marginal cost of production
D
The price of the good itself
Verified step by step guidance1
Understand the difference between price determinants and nonprice determinants of demand. Price determinants refer to the price of the good itself, which directly affects the quantity demanded along the demand curve.
Recall that nonprice determinants of demand are factors other than the good's own price that cause the entire demand curve to shift either to the right (increase in demand) or to the left (decrease in demand).
Identify each option: 'Consumer income' affects consumers' purchasing power and thus shifts the demand curve, making it a nonprice determinant of demand.
'Quantity supplied' and 'Marginal cost of production' relate to the supply side of the market, not demand, so they are not determinants of demand.
'The price of the good itself' affects the quantity demanded along the demand curve, not the position of the demand curve, so it is a price determinant, not a nonprice determinant.
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