Which of the following goods will have a higher price elasticity of demand?
A)a good with few substitutes
B)a good with many substitutes
C)a good that represents a small proportion of the consumer's budget
D)a good that is broadly defined
E)a good that is a necessity

Question

Quizplus · Accepted Answer

A good with many substitutes will have a higher price elasticity of demand because consumers have more options to choose from if the price of that good increases. Therefore, consumers can easily switch to another substitute if the price of one good becomes too high.

Which of the Following Goods Will Have a Higher Price