The demand curve for a good that has many perfect substitutes is likely to be _____
A)upward sloping.
B)steep.
C)backward bending.
D)horizontal.
E)vertical.

Question

Quizplus · Accepted Answer

When a good has many perfect substitutes, consumers can easily switch to alternative products, and therefore, the demand for the product becomes more elastic. As a result of high elasticity, the demand curve becomes flatter and almost horizontal, indicating that a slight change in price would cause a significant change in the quantity demanded. This makes choice D, horizontal demand curve, the best answer.

The Demand Curve for a Good That Has Many Perfect