If There Are Very Few Substitutes Available for a Product

question 76

Multiple Choice

If there are very few substitutes available for a product, demand for that product is likely to be:

• A) perfectly inelastic
• B) quite inelastic
• C) very elastic
• D) either elastic or inelastic, since the number of substitutes available does not affect the elasticity of demand

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Definitions:

General Items

Products or commodities that are basic and nondescript, typically stocked regularly.

Critical Items

Items that are essential for the production process or meet customer demands, where their absence can significantly impact operations.

Quantity Flexibility Contract

An agreement between a supplier and a customer that allows for adjustments in the purchase order quantity within certain predefined limits.

Demand Visibility

The ability of a company to forecast and respond to customer demand in a timely and accurate manner.