Under which of the following conditions is a product most likely to have an elastic demand?
A) Consumers can easily find close substitutes for the product.
B) The marginal cost of producing the product is equal to its marginal revenue.
C) A large portion of a person's budget is spent on the product.
D) The fixed costs associated with producing the product are higher than the variable costs associated with it.

Question

Quizplus · Accepted Answer

Consumers can easily find close substitutes for the product, so they are more likely to switch to another product if the price of the original product increases.

Under Which of the Following Conditions Is a Product Most