Question

Demand for a good will tend to be more elastic if it exhibits which of the following characteristic's?

• A. It represents a small part of the consumer's income
• B. The good has many substitutes available
• C. It is a necessary(as opposed to a luxury)
• D. There is little time for the consumer to adjust to the price change

Answer 1

The correct option is B The good has many substitutes available

Demand for a good will tend to be more elastic if the good has a many substitutes, because many substitutes have more elasticity.