When a good has many close substitutes available, it is likely to be:
A) less price elastic than a good without close substitutes available.
B) more price elastic than a good with many complement goods available.
C) less price elastic than a good with many complement goods available.
D) more price elastic than a good without close substitutes available.

Question

Quizplus · Accepted Answer

When a good has many close substitutes available, consumers have a greater ability to switch to these substitutes if the price of the good increases. This means that the demand for the good is more responsive to changes in price, making it more price elastic. Therefore, option D is the correct answer.

When a Good Has Many Close Substitutes Available, It Is