Resource X has many close substitutes, whereas resource Y has no close substitutes. Other things equal, we would expect

Question

Quizplus · Accepted Answer

The presence of close substitutes makes the demand for a resource more elastic because consumers can easily switch to another resource if the price of the original resource increases. Since resource X has many close substitutes and resource Y has none, the demand for resource X would be more elastic than the demand for resource Y.

Resource X Has Many Close Substitutes, Whereas Resource Y Has