The price elasticity of demand coefficient for a good will be greater:
A) if close substitutes exist.
B) if minor complements exist.
C) in the short-run.
D) if a small portion of the budget will be spent on it.

Question

Quizplus · Accepted Answer

If close substitutes exist, consumers have more options and can easily switch to a substitute if the price of the good increases. Therefore, the price elasticity of demand coefficient will be greater.

The Price Elasticity of Demand Coefficient for a Good Will