If a product has a close substitute, its demand will likely be ________.
A) inelastic
B) elastic
C) cross-elastic
D) fixed
E) break-even

Question

Quizplus · Accepted Answer

When a product has a close substitute, consumers can easily switch to the substitute if the price of the original product increases. This means that the demand for the original product is elastic, as a small change in price will cause a relatively large change in the quantity demanded.

If a Product Has a Close Substitute, Its Demand Will