Demand for a product is likely to be more price elastic if
A)it is considered a necessity.
B)it has many substitutes.
C)it has few substitutes.
D)its price is low relative to a product with which it must be used.
E)none of the above is true.

Question

Quizplus · Accepted Answer

When a product has many substitutes, consumers have the option to switch to another similar product if the price of one product increases. In such a situation, the demand for the product tends to be more price elastic. This is because consumers can easily substitute the product for others in the market.

Demand for a Product Is Likely to Be More Price