Brands believes consumers are "overly sensitive to pricing actions," does he believe the demand for beer is elastic or inelastic?
A. Unit elastic, because for any percentage change in price, there is an equal change in the quantity demanded.
B. Perfectly inelastic, because consumers significantly react to even the smallest changes in price.
C. Price elastic, because overly sensitive to price means that changes in the quantity demanded are greater than the change in price.
D. Price inelastic, because overly sensitive to price means that changes in the quantity demanded are smaller than the change in price.
b. Consumer incomes decrease during recessions. If beer is "recession-proof," what does this imply about the income elasticity of demand for beer?
A. The income elasticity is positive and less than 1, indicating that beer is income inelastic and a normal good.
B. The income elasticity is positive and greater than 1, indicating that beer is income inelastic and a normal good.
C. The income elasticity is negative, suggesting that beer is an inferior good.
D. The income elasticity is positive and greater than 1, indicating that beer is income elastic and a normal good.
