The demand for a good is more price elastic
A) in the short run than in the long run.
B) if closer substitutes are available.
C) if the good is a necessity rather than a luxury.
D) if the share of the good in the average consumer's budget is smaller.

Question

Quizplus · Accepted Answer

The demand for a good is more price elastic if closer substitutes are available because consumers can easily switch to alternatives if the price of the good increases, making its demand more sensitive to price changes.

The Demand for a Good Is More Price Elastic