The impact of elasticity on demand is mostly felt in a homogeneously competitive environment.

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In a homogeneously competitive environment, there are many close substitutes for a given product, and consumers are likely to be more price-sensitive. Therefore, elasticity of demand plays a significant role in determining the demand for a product. In contrast, in a monopolistic or oligopolistic market, where few or no close substitutes exist, producers have more price-setting power and can control demand to a greater extent, making elasticity of demand less relevant.

The Impact of Elasticity on Demand Is Mostly Felt in a Homogeneously