Demand for a product is likely to be more price elastic if it
A)is considered a necessity.
B)has many substitutes.
C)has few substitutes.
D)requires a small cash outlay.
E)is nondiscretionary.

Question

Quizplus · Accepted Answer

When a product has many substitutes, consumers have more options to choose from and can easily switch to a similar product if they perceive the price of the original product to be too high. Therefore, the demand for a product with many substitutes is likely to be more price elastic, meaning a small change in price will cause a larger effect on the quantity demanded.

Demand for a Product Is Likely to Be More Price