If a Good Is a Necessity with Few Substitutes,all Others

question 164

Multiple Choice

If a good is a necessity with few substitutes,all others things equal,then demand will tend to:

• A)be more price-elastic.
• B)be less price-elastic.
• C)have price elasticity equal to 1.
• D)be the same as that of a luxury good.

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Definitions:

Excess Demand

A market condition where the quantity demanded of a good exceeds the quantity supplied at a given price, often leading to price increases.

Supply

The total quantity of a good or service that the market can offer.

Demand

The amount of a product or service that consumers are willing and able to purchase at various prices during a specified period.

Equilibrium

A situation where the amount of goods available in the market matches what consumers want to buy, leading to stable prices and consistent availability.