Which of the following statements is correct?
A) The demand for New Balance shoes is more elastic than the demand for shoes in general.
B) The demand for salt is very elastic.
C) The demand for luxuries is less elastic than the demand for necessities.
D) The demand for a narrowly defined good is less elastic than the demand for a more broadly defined good.
E) The larger the proportion of income spent on a good, the smaller the elasticity of demand.

Question

Quizplus · Accepted Answer

The demand for a specific brand of shoes (like New Balance) is more elastic than the demand for a broader category (like shoes in general) because consumers can easily switch to other brands if the price of New Balance shoes increases, making its demand more sensitive to price changes.

Which of the Following Statements Is Correct