Which of the following would most likely exhibit the highest price elasticity of demand?
A) Gasoline
B) One particular brand of toothpaste
C) Motor oil
D) Salt

Question

Quizplus · Accepted Answer

One particular brand of toothpaste is likely to have the highest price elasticity of demand because there are many substitutes and consumers can easily switch to another brand if the price increases. Gasoline and motor oil are necessary for transportation and have fewer substitutes, so their demand is less affected by price changes. Salt is a low-cost item with no close substitutes, so its demand is relatively inelastic.

Which of the Following Would Most Likely Exhibit the Highest