Goods with close substitutes tend to be more price elastic demand than goods without close substitutes.

Question

Quizplus · Accepted Answer

When a good has close substitutes, consumers have more options to choose from and can easily switch to a substitute if the price of the original good increases. This makes the demand for the original good more price elastic as consumers are sensitive to changes in price and can easily find a substitute. On the other hand, goods without close substitutes may have a more inelastic demand as consumers have few options and are willing to pay a higher price to still obtain the good.

Goods with Close Substitutes Tend to Be More Price Elastic