The major determinants of price elasticity of demand are:
A) availability of complements.
B) availability of substitutes.
C) availability of normal goods.
D) availability of supply.

Question

Quizplus · Accepted Answer

The availability of substitutes is a major determinant of price elasticity of demand. If there are a lot of substitutes available for a product, consumers may switch to those substitutes if the price of the original product increases, causing the demand for the original product to be more elastic (sensitive to price changes). On the other hand, if there are few substitutes available, consumers may be willing to pay a higher price for the original product and the demand would be less elastic. The other choices may influence demand, but are not major determinants of price elasticity.

The Major Determinants of Price Elasticity of Demand Are