Final answer:
The statement is true; the overall demand for tires is more inelastic than the demand for a specific brand like Michelin because the availability of substitutes for a particular brand makes its demand more responsive to price changes.
Step-by-step explanation:
The statement that the demand for tires should be more inelastic than the demand for Michelin brand tires is True. This is because when we talk about the demand for a specific brand like Michelin, the availability of close substitutes (other tire brands) makes the demand for that particular brand more elastic. Consumers can switch to other brands if the price of Michelin tires increases. On the other hand, the demand for tires as a whole is more inelastic because regardless of brand, if you need tires, the necessity of the product means you're less likely to reduce your quantity demanded substantially when prices change.
When discussing the elasticity of demand, we say a demand curve is inelastic if its elasticity value is less than one. This indicates that the percentage change in quantity demanded is smaller than the percentage change in price. Therefore, a move from Point D to Point E, or from Point G to Point H, on an inelastic demand curve will result in smaller changes in quantity demanded compared to the proportionate changes in price.