9
practice examMultiple Choice

Practice Exam

Question 9 • Economics

Which is likely to occur if there is a price increase for a good which exhibits elastic demand?

Answer
A
People might buy a less expensive substitute good.
B
People might buy a less expensive complementary good.
C
People might buy a more expensive substitute good.
D
People might buy a more expensive complementary good.

Explanation

With elastic demand, buyers respond strongly to a price increase by reducing how much of the good they buy. They may switch to a substitute that costs less, which makes “People might buy a less expensive substitute good” the likely outcome. A more expensive substitute would not help them avoid the higher cost.

AI-written and checked against the verified answer.

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