Answer to Question #205833 in Economics of Enterprise for pranesha

Question

Which of the following goods will have the lowest price elasticity of demand? (4 marks)

a) Castle Lite beer

b) Light beer

c) Beer

d) Alcoholic drinks

Answer 1

Castle Lite beer, Light beer, and Beer are the high price elasticity as compare to the alcoholic drinks because this beer generally people consume to show their status in society and for maintain life style they did not become habitual to these beer drinks, 

while the alcohol drunker are the habitual to drink alcohol thus they buy it at any price in market for consumption. It means alcohol drinks have the low price elasticity of demand.

Therefore the Option D is correct. "Alcoholic drinks"