Suppose that good X has few close substitutes and that good Y has many close substitutes. Which good would you expect to have more price inelastic demand?

Substitutes

Substitutes are goods or services that can be used in place of each other, fulfilling the same needs or desires of the consumer.

Price Inelastic

A situation where the demand or supply for a product does not change significantly when its price changes.

Good X

A placeholder term used in economics to represent a specific product or commodity in theoretical discussions.

Comprehend the elements that impact the price elasticity of demand, like the presence of alternative options and the categorization of an item as a luxury or a necessity.

Verified Answer

Final Answer :

good X

Learning Objectives

Comprehend the elements that impact the price elasticity of demand, like the presence of alternative options and the categorization of an item as a luxury or a necessity.