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CIPS L4M5 Exam - Topic 4 Question 8 Discussion

Which of the following would cause a demand curve for a good to be price inelastic?
D) The necessary goods
A) There are a great number of substitutes for the good
B) The consultancy service
C) The luxury goods

CIPS L4M5 Exam - Topic 4 Question 8 Discussion

Actual exam question for CIPS's L4M5 exam
Question #: 8
Topic #: 4
[All L4M5 Questions]

Which of the following would cause a demand curve for a good to be price inelastic?

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Suggested Answer: D

Essential goods and services such as electricity, fuel, basic food stuffs, commuter transport and habitual products such as tobacco, alcohol and sugar-based drinks are often sited as facing a relatively inelastic demand curve. This means when the price goes up, the quantity demanded does not decrease very much and so they are often the target of government taxation.

LO2, AC 2.2


by Deeanna at May 09, 2022, 09:10 PM

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Alline
11 months ago
Yeah, necessary goods like food and medicine fit the bill!
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Markus
11 months ago
Substitutes definitely make demand more elastic, not inelastic.
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Eden
12 months ago
Wait, how can consultancy services be inelastic?
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Frederick
12 months ago
Totally agree, luxury goods are more elastic!
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Eladia
12 months ago
Necessary goods are usually price inelastic.
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Annmarie
1 year ago
Hmm, I'm a bit unsure about this one. I'll need to review my notes on the architecture repository and governance processes to figure out the right response.
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Corrinne
1 year ago
I think the term might be differential rates, but I'm not completely sure. It seems like a good fit for what we discussed in class.
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Tegan
1 year ago
Okay, let's see. Sunk costs, resistance to change, and unclear objectives all make sense as reasons. But increased ownership of work? I'm not so sure about that one. I'll have to double-check my understanding.
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Blondell
1 year ago
I remember practicing a similar question where it was about the key used for authenticating specific IP ranges. I'll go with that angle.
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Giuseppe
1 year ago
Okay, I think I've got a good handle on the key actions you can perform on requisitions. I'll select the 5 that seem most relevant.
upvoted 0 times
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