Question

Why do consumers sometimes take a while to respond to price changes?

a. price changes do not affect consumers.
b. consumers cannot find acceptable substitutes immediately.
c. consumers need time to decide whether the good is a luxury or a necessity.
d. demand sometimes becomes less elastic over time?

Answer 1

Why do consumers sometimes take a while to respond to price changes?

B. Consumers cannot find acceptable substitutes immediately.

Although price changes can happen immediately, response times often take a bit because consumers are not able to stop purchasing a product as soon as the price rises. Usually, a consumer needs time to find a subtitute that still meets their needs for a lower cost. Overtime the rate of response to price changes because they are able to switch to a new brand.

Answer 2

b. consumers cannot find acceptable substitutes immediately