If close substitutes are available, then the elasticity of demand will be
A) low
B) moderate
C) high
D) optimum

Question

Quizplus · Accepted Answer

When close substitutes are available for a product, consumers can easily switch to another product if the price of the original product increases. This makes the demand for the original product more sensitive to price changes, or in other words, more elastic. Hence, the elasticity of demand will be high.

If Close Substitutes Are Available, Then the Elasticity of Demand