The demand for a specific brand of corn flakes cereal is likely to be:
A) very price elastic, because there are many close substitutes available.
B) less price elastic, because there are many close substitutes available.
C) very price elastic, because the cost of cornflakes relative to income is low.
D) less price elastic, because cornflakes are an inferior good for many consumers.

Question

Quizplus · Accepted Answer

The availability of close substitutes makes the demand for a specific brand of corn flakes cereal very price elastic. Consumers can easily switch to another brand or product if the price of their preferred brand increases.

The Demand for a Specific Brand of Corn Flakes Cereal