Which statement best explains how elasticity and incentives work together?

A. An elastic good, such as a game, is more likely to respond to incentives.

B. An inelastic good, such as a game, is more likely to respond to incentives.

C. An elastic good, such as a game, is less likely to respond to incentives.

D. An inelastic good, such as a game, is less likely to respond to incentives.

Answer

Incentives are applied to items that have high elasticity to increase the

Number of prospective consumers.

Reasons:

Elasticity in quantity demanded is an indication that the quantity demanded changes appreciably when other factors changes, such as the price of the commodity.

A commodity that has elastic demand changes the quantity demanded rapidly following a small change in another factor.

Examples of items that have elasticity are; Luxury goods, and some non-essential goods such as a game, or a pleasure ride.

Due to the sensitivity of consumers to such items, consumers may be made to order such items based on incentives and demand for elastic goods can be made to increase due to added incentives.

Therefore, the correct option is; An elastic good, such as a game, is more likely to respond to incentives.