Question

With fewer substitutes, demand tends to be:

A) Elastic
B) Inelastic
C) Constant
D) Volatile

Answer 1

The correct answer is inelastic. If there are fewer substitutes available for a product, the demand tends to be more inelastic. Consumers are less responsive to changes in price when there are limited substitute options.

Step-by-step explanation:

The correct answer is inelastic.

If there are fewer substitutes available for a product, the demand tends to be more inelastic. This means that the percentage change in demand is smaller than the percentage change in price. In other words, consumers are less responsive to changes in price when there are limited substitute options.

For example, if the price of a certain brand of sneakers increases, consumers may still choose to buy them even if there are fewer substitute options available. This indicates an inelastic demand.