As the number of substitutes available for a good increases,the price elasticity of demand for the good ________.
A) initially increases and then decreases
B) initially decreases and then increases
C) decreases
D) increases

Question

Quizplus · Accepted Answer

When the number of substitutes available for a good increases, consumers have more options to choose from, making them more price-sensitive as they can easily switch to a substitute if the price of the good increases. This leads to an increase in the price elasticity of demand for the good.

As the Number of Substitutes Available for a Good Increases,the