Answer Happy

8. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand: • The availability of close substitutes • Product's share of the consumer's total budget A good without any close substitutes is likely to have relatively the price of the good rises. The price elasticity of demand for a good depends on the price of the good relative to consumers' incomes. Which of the following goods has the most elastic demand? Lemons O Car Shoes demand, since consumers cannot easily switch to a substitute good if O Board games