Asked by Andrea S. Marrero on Jul 07, 2024
Verified
When there are fewer substitutes for a product, the ________ for the product is ________.
A) demand; less price elastic
B) demand; more price elastic
C) income elasticity; greater
D) income elasticity; smaller
Price Elastic
A term related to price elasticity, which measures the responsiveness of the quantity demanded of a good or service to a change in its price.
Fewer Substitutes
A market condition where there are limited alternative products or services available, potentially leading to higher prices or less choice for consumers.
- Familiarize oneself with the dynamics between demand elasticity and aggregate revenue.
- Recognize how the availability of substitutes affects the price elasticity of demand.
Verified Answer
MJ
Mario JimenezJul 08, 2024
Final Answer :
A
Explanation :
When there are fewer substitutes for a product, the demand for that product becomes less price elastic because consumers have fewer alternative products to switch to if the price of the product increases.
Learning Objectives
- Familiarize oneself with the dynamics between demand elasticity and aggregate revenue.
- Recognize how the availability of substitutes affects the price elasticity of demand.