Ceteris paribus,as the number of substitutes for a good increases,the
A)Price elasticity of demand should become smaller.
B)Price elasticity of demand should become larger.
C)Cross-price elasticity of demand should become negative.

Question

Quizplus · Accepted Answer

When there are more substitutes available for a good, consumers have more options to switch to if the price of the original good increases. This means that the demand for the original good becomes more elastic, as consumers can easily switch to a substitute if the price of the original good becomes too high. Therefore, the price elasticity of demand should become larger.

Ceteris Paribus,as the Number of Substitutes for a Good Increases,the