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Question

Demand for a good will tend to be relatively more price elastic if it exhibits which of the following characteristics?


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

The correct option is A 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.
Hence, the correct option is B.

Maths

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