What is a major factor influencing the elasticity of demand for a product?
A) the decrease in price of the product
B) the drop in demand for the product's substitutes or complements
C) the availability of substitutes
D) the increase in supply of the product

Question

Quizplus · Accepted Answer

Availability of substitutes is a major factor influencing the elasticity of demand for a product. If there are many substitutes available for a product, consumers will have more options to choose from and may be less likely to purchase the product if its price increases. In this case, the demand for the product is more elastic. On the other hand, if there are few substitutes available, consumers may continue to purchase the product even if its price increases, making the demand for the product more inelastic.

What Is a Major Factor Influencing the Elasticity of Demand