An important determinant of the price elasticity of demand is the:
A)price of related goods.
B)level of technology.
C)availability of substitutes.
D)quantity of the good supplied.

Question

Quizplus · Accepted Answer

The availability of substitutes is an important determinant of price elasticity of demand because when substitutes are readily available, consumers have more options and can switch to other products if the price of the original product increases. This means that the demand for the original product will be more elastic (i.e., responsive) to price changes. Therefore, the more substitutes that are available, the more elastic the demand will be.

An Important Determinant of the Price Elasticity of Demand Is