When a good is more broadly defined,
A) the more substitutes it has so the more elastic is its demand.
B) the fewer substitutes it has so the more elastic is its demand.
C) the more substitutes it has so the less elastic is its demand.
D) the fewer substitutes it has so the less elastic is its demand.

Question

Quizplus · Accepted Answer

When a good is more broadly defined, it has fewer substitutes, making its demand less elastic. This is because consumers have fewer alternatives to switch to if the price changes.

When a Good Is More Broadly Defined