Reading Comprehension: Inference Questions

The passage suggests which of the following regarding the difference between the effects of an increasing number of product substitutions and the effects of a long-lasting price change upon price elasticity of demand?

Excellent work!

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Both duration of price change and product substitutions cause demand for a product to become more elastic.

Incorrect.

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While the passage ascribes the same effect to the existence of product substitutions and a long-term rise in price, it does not imply that this effect is greater inelasticity of demand, but the opposite - greater elasticity of demand.

Incorrect.

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The passage does not tell us that product substitutions produce greater elasticity of demand than duration of price change, only that they both increase elasticity of demand.

Incorrect.

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The passage does not tell us that product substitutions produce greater elasticity of demand than duration of price change, only that they both increase elasticity of demand.

Incorrect.

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The passage does not tell us that duration of price change produces greater elasticity of demand than product substitutions, only that they both increase elasticity of demand.

Long-lasting price changes produce more elastic demand than product substitutions do.

Product substitutions produce more elastic demand than long-lasting price changes do.

Product substitutions produce more elastic demand than long-lasting price changes do only when the price change lasts so long that the customer cannot remember the previous price.

Both the existence of substitutions and a long-term price change cause inelasticity of demand.

There is no difference.