The elasticity of demand can change with
A)the number of close substitutes.
B)the time available to shift to other alternatives.
C)neither a nor b
D)both a and b

Question

Quizplus · Accepted Answer

The elasticity of demand is largely dependent on the availability of close substitutes and the time constraints in which consumers can switch to these alternatives. Thus, both options A and B are correct. As the number of close substitutes increases, the elasticity of demand tends to be higher, as consumers have a wider range of options to choose from. Similarly, if consumers have more time to shift to other alternatives, they are more likely to be sensitive to changes in price, resulting in a higher elasticity of demand.

The Elasticity of Demand Can Change with