Introduction to Economics 1 Deneme Sınavı Sorusu #1256851
Which of the following statement is correct about the price elasticity of demand?
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Goods with close substitutes tend to have more inelastic demand than goods without close substitutes since it is easier for consumers to give up that good and switch to its substitutes. |
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Goods with close substitutes tend to have more elastic demand than goods without close substitutes since it is easier for consumers to give up that good and switch to its substitutes. |
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Goods with close substitutes tend to have perfectly (infinite) elastic demand than goods without close substitutes since it is easier for consumers to give up that good and switch to its substitutes. |
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Goods with close substitutes tend to zero elastic demand since it is not easier for consumers to give up that good and switch to its substitutes. |
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Goods with close substitutes tend to have unit elastic demand since it is easier for consumers to give up that good and switch to its substitutes. |
Determinants of Price Elasticity of Demand-Are Close Substitutes of the Good Available to Consumers?
Price changes affect the consumer behavior by changing their quantity demanded in the opposite direction. How much consumers change their quantity demanded is mostly affected by the availability of close substitutes of the good. Goods with close substitutes tend to have more elastic demand than goods without close substitutes since it is easier for consumers to give up that good and switch to its substitutes. For example, apple and orange or pears are easily substitutable.
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