Demand for McDonald's hamburgers is more elastic than demand for hamburgers made at home because
A) the percentage of the household budget spent on hamburgers is small.
B) hamburgers are a luxury.
C) there are more close substitutes for McDonald's hamburgers than there are for hamburgers made at home.
D) McDonald's hamburgers are a necessity.

Question

Quizplus · Accepted Answer

There are more close substitutes for McDonald's hamburgers, such as other fast-food burgers, making it easier for consumers to switch if prices rise, hence more elastic demand. Homemade hamburgers have fewer direct substitutes, making their demand less elastic.

Demand for McDonald's Hamburgers Is More Elastic Than Demand for Hamburgers