Economics Elasticity Of Demand Questions
The concept of price elasticity of demand for substitute goods refers to the measure of how responsive the quantity demanded of a particular good is to a change in its price, when there are alternative goods available in the market. It measures the degree to which consumers are willing to switch from one substitute good to another in response to a change in price. If the demand for a substitute good is highly elastic, it means that consumers are very responsive to price changes and are likely to switch to the substitute good if its price becomes more favorable. Conversely, if the demand for a substitute good is inelastic, it means that consumers are less responsive to price changes and are less likely to switch to the substitute good even if its price changes.