Question

Other things being equal (ceteris paribus), the price elasticity of a product tends to be higher.

a.) To the extent that the product has a greater number of substitutes.
b.) The shorter the period of time elapsed.
c.) To the average that more consumers perceive it as a necessary good.
d.) The broader the market.
e.) To the extent that the asset is less important in the budget of the
consumer.

Answer 1

The price elasticity of a product tends to be higher when there are more substitutes, when the period of time elapsed is shorter, and when more consumers perceive it as a necessary good.

Step-by-step explanation:

The price elasticity of a product tends to be higher when:

1. The product has a greater number of substitutes, as consumers can find an alternate product instead of paying the increased price.
2. The period of time elapsed is shorter, as consumers may not have enough time to adjust their purchasing behavior.
3. The product is perceived as a necessary good by more consumers, as they are less likely to change their purchasing behavior even with a price increase.