Recently, much of the western United States experienced a drought condition, and water usage was restricted in Denver. Yet, even though most people used less water, the price of water did not drop. When the drought was declared over, the water company raised water prices. However, the residents of Denver did not use less water. Here, water is

Question

Ada Benson

Business

13 March, 12:15

Recently, much of the western United States experienced a drought condition, and water usage was restricted in Denver. Yet, even though most people used less water, the price of water did not drop. When the drought was declared over, the water company raised water prices. However, the residents of Denver did not use less water. Here, water is

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Answers (1)

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Josephine Humphrey · Answer 1

Price elasticity

Explanation:

Price elasticity -

It refers to the extent to which the demand or desire for something alters with the fluctuation in the price, is referred to as price elasticity.

As if the price of some commodity goes up, people tends to not buy the thing any more and tries to finds it cheaper alternative.

And, as the price reduces, people tries to buy the specific goods and service.

Hence, from the given scenario of the question,

The correct answer is price elasticity.