The demand curve for Froot Loops breakfast cereal is very elastic because:
A) most breakfast cereals are considered a luxury good.
B) there are many good substitutes for Froot Loops.
C) the demand curve is negatively sloped.
D) it is one of the most advertised cereals in the world.

Question

Quizplus · Accepted Answer

The elasticity of demand for a product is determined by the availability of substitute products. If there are many good substitutes for a product, consumers can easily switch to a different product if the price of the original product changes. In the case of Froot Loops, there are many other breakfast cereals available that are similar in taste and price, which makes the demand for Froot Loops very elastic.

The Demand Curve for Froot Loops Breakfast Cereal Is Very