If consumers think that there are very few substitutes for a good, then ?
Correct answer: C. demand would tend to be price inelastic
- A. Supply would tend to be price elastic
- B. none of these answers
- C. demand would tend to be price inelastic
- D. demand would tend to be price elastic
Explanation
Few substitutes make it difficult for consumers to switch when the price rises, so quantity demanded changes relatively little. This makes demand price inelastic.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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