Demand will be more inelastic the
A)lower the price of the good.
B)smaller the quantity demanded of the good.
C)longer the passage of time after a price increase.
D)fewer substitutes for the good that are available.
E)larger the fraction of income spent on the good.

Question

Quizplus · Accepted Answer

Demand is more inelastic when there are fewer substitutes available for the good. This means that consumers are less likely to switch to a different good if the price of the original good increases. In contrast, if there are many substitutes available, consumers are more likely to switch to a different good if the price of the original good increases, making demand more elastic.

Demand Will Be More Inelastic the