If consumers think that there are very few substitutes for a good, then
A) supply would tend to be price elastic.
B) none of these answers.
C) demand would tend to be price inelastic.
D) demand would tend to be price elastic.
E) supply would tend to be price inelastic.

Question

Quizplus · Accepted Answer

If consumers believe that there are few substitutes for a good, they are likely to be less sensitive to changes in price and thus demand would be less responsive or inelastic. This is because they feel that they have no other options and must purchase the good regardless of the price.

If Consumers Think That There Are Very Few Substitutes for a Good