Price elasticities tend to be higher,the greater the number of substitutes.

Question

Quizplus · Accepted Answer

When there are more substitutes available in the market, customers have the option to switch to alternatives if the price of a particular product increases, making the demand more price elastic. In contrast, if fewer substitutes are available, customers may continue to purchase the product even if the price goes up, reducing the price elasticity of demand.

Price Elasticities Tend to Be Higher,the Greater the Number of Substitutes