The demand for Post Raisin Bran is more elastic than the demand for raisin bran in general because _____
A)it is consumed in the short run rather than in the long run.
B)Post Raisin Bran is a luxury.
C)Post Raisin Bran has no substitutes.
D)there are many substitutes for raisin bran cereal in general.
E)Post Raisin Bran is a broadly defined good.

Question

Quizplus · Accepted Answer

The elasticity of demand for a product depends on the availability of substitutes. Since there are many substitutes for raisin bran cereal in general, such as other brands of raisin bran or other breakfast cereals, the demand for Post Raisin Bran is more elastic compared to the demand for raisin bran in general. This means that a small change in price of Post Raisin Bran can have a significant effect on the quantity demanded.

The Demand for Post Raisin Bran Is More Elastic Than