The demand for a product is more elastic
A)When it has few substitutes
B)In the long-run
C)When the expenditure on the product represent a small portion of the budget
D)When the product is broadly defined

Question

​The demand for a product is more elastic
A)​When it has few substitutes
B)In the long-run
C)When the expenditure on the product represent a small portion of the budget
D)​When the product is broadly defined

Quizplus · Accepted Answer

In the long-run, consumers have more time to adjust their consumption patterns and find substitutes for the product, making the demand more elastic. Option A is incorrect because when a product has few substitutes, consumers have fewer options to switch to, making the demand less elastic. Option C is incorrect because if the expenditure on the product represents a small portion of the budget, consumers may not be as influenced by price changes, making the demand less elastic. Option D is incorrect because a broadly defined product may have many substitutes, making the demand more elastic.

​The Demand for a Product Is More Elastic

The Demand for a Product Is More Elastic