In which of the following cases with the demand for a commodity be more elastic?

Availability of close substitute goods

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Availability of perishable goods

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Availability of durable goods

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Availability of capital goods

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Solution

The correct option is A
Availability of close substitute goods

Demand is said to be elastic when percentage change in demand is much greater than percentage change in price. This type of situation occurs when close substitutes of goods are available in the market.

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