The demand for Cheerios cereal is more price-elastic than the demand for cereals as a whole. This is best explained by the fact that
A)Cheerios are a luxury.
B)Cereals are a necessity.
C)there are more substitutes for Cheerios than for cereals as a whole.
D)consumption of cereals as a whole is greater than consumption of Cheerios.

Question

Quizplus · Accepted Answer

The demand for a specific brand like Cheerios is more price-elastic compared to the demand for a broad category like cereals because there are more substitutes available for Cheerios. If the price of Cheerios increases, consumers can easily switch to other brands or types of cereal, making its demand more sensitive to price changes.

The Demand for Cheerios Cereal Is More Price-Elastic Than the Demand