The more _____ a product is defined, the more substitutes are likely to be available, and the more price _____ it will be.
A) narrowly; elastic
B) narrowly; inelastic
C) broadly; elastic
D) broadly; unit elastic

Question

Quizplus · Accepted Answer

When a product is defined narrowly, it means it has very specific features or uses, making it easier for consumers to find alternative products that can serve the same purpose. This increases the number of substitutes available. Consequently, the demand for that product becomes more price elastic, meaning consumers are more sensitive to price changes and may switch to substitutes if the price increases.

The More _____ a Product Is Defined, the More Substitutes