Ace the CPCA Challenge 2025 – Unleash Your Professional Power with Practice Questions!

When a product's sales remain unchanged in response to a price increase, it indicates that the product has a low price elasticity of demand. Low elasticity means that consumers are relatively insensitive to price changes, often because the product is a necessity, lacks close substitutes, or represents a small portion of consumers' budgets. In such cases, even if the price rises, consumers will continue to purchase the same quantity of the product due to its importance or lack of alternatives.

In contrast, high elasticity would suggest that a price increase would lead to a significant drop in sales. Perfectly elastic demand means that any increase in price would result in zero quantity demanded, which is not the case here. Unitary elasticity indicates that a price change would result in a proportional change in quantity demanded, which again does not align with the scenario described. Therefore, low elasticity appropriately explains the situation where the price increase does not affect sales volume.