If good A had twice as many good substitutes as good B, but good B consumed twice the amount of a buyers income as good A, goods A and B would have the same elasticity of demand.

Question

Quizplus · Accepted Answer

The elasticity of demand depends on multiple factors, including the availability of substitutes and the proportion of income spent on the good. More substitutes typically increase elasticity, while a higher income proportion decreases it. Therefore, goods A and B would not necessarily have the same elasticity of demand.

If Good a Had Twice as Many Good Substitutes as Good