Table 6-2

-Refer to Table 6-2.Assume that an economist has estimated the price elasticity of demand values in the table above.Use the data in the table to select the correct statement.
A)The demand for Coca-Cola is inelastic.
B)The elasticity for "All soft drinks" is less than the elasticity for Coca-Cola because Coca-Cola is more of a luxury than a necessity; "All soft drinks" represent goods that are more necessity than luxury.
C)The difference in elasticity values is explained by the fact that the more narrowly we define a market the more elastic the demand will be.
D)There are fewer substitutes for "All carbonated soft drinks" than there are for "All soft drinks."

Question

Table 6-2
 
-Refer to Table 6-2.Assume that an economist has estimated the price elasticity of demand values in the table above.Use the data in the table to select the correct statement.
A)The demand for Coca-Cola is inelastic. 
B)The elasticity for "All soft drinks" is less than the elasticity for Coca-Cola because Coca-Cola is more of a luxury than a necessity; "All soft drinks" represent goods that are more necessity than luxury. 
C)The difference in elasticity values is explained by the fact that the more narrowly we define a market the more elastic the demand will be. 
D)There are fewer substitutes for "All carbonated soft drinks" than there are for "All soft drinks."

Quizplus · Accepted Answer

The more narrowly a market is defined, the more substitutes are available, making the demand more elastic.

Table 6-2 -Refer to Table 6-2.Assume That an Economist Has Estimated the Economist