Demand for a good will tend to be more price elastic if it exhibits which of the following characteristics?
A)It accounts for a small part of the consumer's total income.
B)The good has many available substitutes.
C)It is a non-durable (as opposed to a durable good).
D)There is little time for the consumer to adjust to the price change.

Question

Quizplus · Accepted Answer

When a good has many available substitutes, consumers can switch to a substitute if the price of the good increases, making the demand for the good more price elastic. A good that accounts for a small part of the consumer's total income may also be more price elastic, but this is not universally true. Non-durable goods may have more elastic demand in some cases, but not necessarily always. The time available for consumers to adjust to a price change can also affect the price elasticity of demand, but there is not enough information in the question to determine if this is true in this case.

Demand for a Good Will Tend to Be More Price