There Are Very Few,if Any,good Substitutes for Automotive Tires

question 269

Multiple Choice

There are very few,if any,good substitutes for automotive tires.Therefore,the demand for automotive tires would tend to be

• A)elastic.
• B)unit elastic.
• C)inelastic.
• D)highly responsive to changes in income as well as changes in prices.

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Definitions:

Substitutes

Products or services that can be used in place of each other. Higher the similarity, the more easily consumers can switch between them, affecting demand.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as the percentage change in quantity demanded divided by the percentage change in price.

Midpoint Formula

A method for calculating the percentage change in a variable by dividing the change by the average of the initial and final values, often used in economics to measure elasticity.

Labor Supply

The total hours that workers are willing and able to work at a given wage rate, in a given time period.