How would the invention of nuclear power plants affect the elasticity of demand

How would the invention of nuclear power plants

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10. How would the invention of nuclear power plants affect the elasticity of demand for coal? a.It would increase the elasticity of demand for coal, as consumers would now be less reactive tochanges in the price of coal.Incorrect. Nuclear power increases the number of substitutes for coal, thus will increase the elasticityof demand for coal, but this is because additional substitutes make consumers more, not less,reactive to changes in the price of coal.b.It would decrease the elasticity of demand for coal, as consumers would now be less reactive tochanges in the price of coal.Incorrect. Nuclear power increases the number of substitutes for coal, making consumers morereactive to changes in the price of coal; that is, it increases the elasticity of demand for coal.c.It would increase the elasticity of demand for coal, as consumers would now be more reactive tochanges in the price of coal.Correct. Nuclear power increases the number of substitutes for coal, making consumers morereactive to changes in the price of coal; that is, it increases the elasticity of demand for coal.d.It would decrease the elasticity of demand for coal, as consumers would now be more reactive tochanges in the price of coal.Incorrect. Although nuclear power increases the number of substitutes for coal, making consumersmore reactive to changes in the price of coal, this means that it increases, not decreases, the elasticityof demand for coal.
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11. How would the increasing prevalence of telecommuting affect the elasticity of demand for cars? a.It would increase the elasticity of demand for cars, as consumers would now be less reactive tochanges in the price of cars.Incorrect. Telecommuting affects the elasticity of demand for cars in two ways. First, it acts as asubstitute for a car in some situations, allowing for people to get to work without driving there.Second, the fact that you don't need a car to work makes a car more of a luxury than it mightotherwise be. Although both these facts increase the elasticity of demand for cars, an increasedelasticity of demand means consumers will be more, not less, reactive to changes in the price of cars.b.It would decrease the elasticity of demand for cars, as consumers would now be less reactive tochanges in the price of cars.Incorrect. Telecommuting affects the elasticity of demand for cars in two ways. First, it acts as asubstitute for a car in some situations, allowing for people to get to work without driving there.Second, the fact that you don't need a car to work makes a car more of a luxury than it mightotherwise be. Both of these facts increase the elasticity of demand for cars and make consumersmore reactive to changes in the price of cars.c.It would increase the elasticity of demand for cars, as consumers would now be more reactive tochanges in the price of cars.Correct. Telecommuting increases the elasticity of demand for cars in two ways. First, it acts as asubstitute for a car in some situations, allowing for people to get to work without driving there.
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