Which of the following statements about price elasticity of demand most accurate?
A)The more substitutes a product has,the more likely it is to be price elastic.
B)Almost all products show price inelasticity.
C)Nondiscretionary,(necessary)purchases are price elastic.
D)With inelastic demand,reducing price has a very large impact on revenues.
E)With inelastic demand,manufacturers change prices frequently to capitalize on consumer behavior.

Question

Quizplus · Accepted Answer

When a product has more substitutes available in the market, consumers have more options to choose from if the price increases, making them more likely to switch to a substitute if the price of the original product goes up. Therefore, the product is more likely to have price elasticity of demand.

Which of the Following Statements About Price Elasticity of Demand