If new substitutes for a good appear on the market, we would expect the price elasticity of demand for that product to increase.

Name: If new substitutes for a good appear on the market, we would expect the price elasticity of demand for that product to increase.
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Question

Quizplus · Accepted Answer

The availability of substitutes makes consumers more sensitive to price changes, as they can easily switch to alternatives if the price of the original product increases, thus increasing the price elasticity of demand.

If New Substitutes for a Good Appear on the Market