Which of these statements about price elasticity of demand is most accurate?
A) The more substitutes a product has, the more likely it is to be price elastic.
B) All products show some 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

Products with more substitutes tend to be more price elastic because consumers can easily switch to alternatives if the price rises.

Which of These Statements About Price Elasticity of Demand Is