Question

a) Which of the following statements is true?A) The more narrowly we define a market, the more elastic the demand for a product will be.B) In general, if a product has few substitutes it will have an elastic demand.C) The demand curve for a necessity is more elastic than the demand curve for a luxury.D) The more time that passes the more inelastic the demand for a product becomes.

Answer 1

The answer is: A) The more narrowly we define a market, the more elastic the demand for a product will be.

Step-by-step explanation:

When markets are narrowly defined, products tend to have closer substitute goods. That means that if the product's price increases, then customers will buy more substitute goods and less of that product. Products with close substitutes will always have higher price elasticity since a competing product will always be an option.