Figure 16-1 Chantal Owns a Hairdressing Salon Which Caters

Figure 16-1 Chantal owns a hairdressing salon which caters to two main groups of customers: residents of "The Chateau," a retirement community,and other residents in the neighborhood.Figure 16-1 shows the demand curves for the residents of the retirement community,labeled Market A,and other residents in the neighborhood,labeled Market B.The demand curves are not identical.
-Refer to Figure 16-1.Which group of customers is likely to have a more elastic demand curve (more sensitive to price) ?

A) the other residents of the neighborhood - market B
B) There is no difference in the elasticity of demand between the two groups.
C) the customers from "The Chateau" - market A
D) There is insufficient information to answer this question.

Correct Answer:

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