The more substitutes available for a product, the
A) larger is its price elasticity of demand.
B) smaller is its income elasticity of demand.
C) larger is its income elasticity of demand.
D) smaller is its price elasticity of demand.

Question

Quizplus · Accepted Answer

When there are more substitutes available for a product, consumers can easily switch to other products if the price of the product increases, making the demand for the product more sensitive to price changes. This is reflected in a larger price elasticity of demand.

The More Substitutes Available for a Product, the