If consumers believe that products are relatively similar and that there are substitutes available, the demand will tend to be
A) elastic
B) inelastic
C) elastic for price increases, but inelastic for price decreases
D) inelastic for price increases, but elastic for price decreases

Question

Quizplus · Accepted Answer

If consumers believe that products are relatively similar and that there are substitutes available, the demand will tend to be elastic since consumers can purchase a substitute.

If Consumers Believe That Products Are Relatively Similar and That