There are several close substitutes for Bayer aspirin but fewer substitutes for a complete medical examination.Therefore, you would expect the demand for:
A) medical exams to be more price elastic.
B) Bayer aspirin to be more price elastic.
C) Bayer aspirin to be more price inelastic.
D) both to be equally price elastic.

Question

Quizplus · Accepted Answer

When there are several close substitutes for a product, consumers can easily switch to another product if the price of the original product increases. This makes the demand for that product more price elastic. Since Bayer aspirin has several close substitutes, its demand is more price elastic compared to a complete medical examination, which has fewer substitutes.

There Are Several Close Substitutes for Bayer Aspirin but Fewer