If consumers start to believe they need a product, what is likely to happen?

A.

The demand becomes less elastic.

B.

The demand becomes more elastic.

C.

The supply decreases.

D.

The price decreases.

The answer is A. The demand becomes less elastic.

The correct answer is A. The demand becomes less elastic.

Explanation:

In economics and related fields, the decisions of consumers had a great impact on other factors including the demand and supply. In the case of demand (willingness to purchase a product), if consumers start to believe they need a product it is likely more consumers will buy the product even if there are changes in its price. As a result of this, the demand would become less elastic; this means the demand would not change according to price changes but will be mainly stable.

An example of this is electricity because in the last decades most consumers have started to believe this is a basic service or product, and therefore they pay for it even if the price increases, which makes the demand less elastic. This does not occur with expensive cars or other items that are not seen as necessary.