Coal is required to make steel. Hence, the price elasticity of demand for coal by steel manufacturers will be

Question

Quizplus · Accepted Answer

The price elasticity of demand for coal by steel manufacturers will be inelastic because coal is a crucial input in the manufacturing of steel and has no good substitutes. The steel manufacturers cannot easily switch to any other alternative due to technical constraints in the manufacturing process, making the demand for coal inelastic. Hence, a change in price will not affect the demand for coal significantly.

Coal Is Required to Make Steel