Asked by Narendrakumar Chowdary on Jun 30, 2024
Verified
The demand for a product is more elastic
A) When it has few substitutes
B) In the long-run
C) When the expenditure on the product represent a small portion of the budget
D) When the product is broadly defined
Elastic Demand
A market condition where the demand for a product or service significantly changes in response to changes in its price.
Long-Run
A period in which all factors of production and costs are variable, allowing companies the flexibility to make changes in production capacity and operations.
Few Substitutes
Refers to a market condition where there are not many alternative products or services available to consumers, which often leads to less competition and higher prices.
- Gain insight into the variables determining demand elasticity.
Verified Answer
RR
Rodney ReynaJul 05, 2024
Final Answer :
B
Explanation :
In the long-run, consumers have more time to adjust their consumption patterns and find substitutes for the product, making the demand more elastic. Option A is incorrect because when a product has few substitutes, consumers have fewer options to switch to, making the demand less elastic. Option C is incorrect because if the expenditure on the product represents a small portion of the budget, consumers may not be as influenced by price changes, making the demand less elastic. Option D is incorrect because a broadly defined product may have many substitutes, making the demand more elastic.
Learning Objectives
- Gain insight into the variables determining demand elasticity.