If there are few substitutes for a product, few competitors, and a short time period under consideration, then
A) the price elasticity of demand coefficient is equal to-1.
B) this product has an elastic demand.
C) a given percentage change in price will result in a much larger percentage change in the quantity demanded.
D) if price rises, total revenue (or total consumer expenditures) will also rise.
E) the price elasticity of demand is large.

Question

Quizplus · Accepted Answer

In a market with few substitutes and competitors, and over a short time period, demand tends to be inelastic. This means that a price increase will not significantly reduce the quantity demanded, leading to an increase in total revenue.

If There Are Few Substitutes for a Product, Few Competitors