If there are very few substitutes for a product, then an increase in its price causes
A)a relatively large increase in quantity demanded.
B)a relatively large decrease in quantity demanded.
C)no change in quantity demanded.
D)a relatively small increase in quantity demanded.
E)a relatively small decrease in quantity demanded.

Question

Quizplus · Accepted Answer

When there are very few substitutes for a product, consumers have limited alternatives to switch to if the price of the product increases. As a result, the decrease in quantity demanded is relatively small because consumers do not have many other options to fulfill their needs.

If There Are Very Few Substitutes for a Product, Then