When numerous but imperfect substitutes exist for a good, the demand for the good will tend to be
A) inelastic.
B) elastic.
C) unitary.
D) perfectly elastic.

Question

Quizplus · Accepted Answer

When there are numerous but imperfect substitutes available for a good, consumers have more options to choose from and can easily switch to a substitute if the price of the original good increases. This makes the demand for the original good more elastic, meaning that a small change in price can lead to a larger change in quantity demanded. Conversely, when there are few or no substitutes available for a good, the demand tends to be more inelastic, as consumers have little choice but to pay a higher price if they want to continue consuming that good.

When Numerous but Imperfect Substitutes Exist for a Good, the Demand