Good X has a high price elasticity of demand; it is most likely that
A)consumers have high incomes.
B)good X has a lot of substitutes.
C)good X has a lot of complements.
D)good X is in short supply.
E)good X is not related to any other goods.

Question

Quizplus · Accepted Answer

When a good has a high price elasticity of demand, it means that consumers are highly responsive to changes in its price. This is often the case when the good has a lot of substitutes available, as consumers can easily switch to a cheaper alternative if the price of good X increases. Therefore, option B is the most likely explanation for why good X has a high price elasticity of demand.

Good X Has a High Price Elasticity of Demand; It