Closesubstitute goods, Microeconomics

Closesubstitute goods:

The number of closesubstitute goods

The more substitutes of good has and the more close the substitutes are, the more elastic the demand for the good. For example, the beverage, bornvita, has a number of close sustitutes such as milo, chocolim, ovaltine etc. Therefore, the demand for bornvita is likely to be more leastic because the slightest increase in the price of bornvita, consumers of the product will switch to the consumption of one of the substitutes.

On the other hand, if the goods does not have any close sustitute, the demand tends to be less elastic or inelastic. For example, there is hardly a substitute to food as a whole hence the demand for food as a whole is inlestic.

Posted Date: 1/2/2013 6:59:38 AM | Location : United States







Related Discussions:- Closesubstitute goods, Assignment Help, Ask Question on Closesubstitute goods, Get Answer, Expert's Help, Closesubstitute goods Discussions

Write discussion on Closesubstitute goods
Your posts are moderated
Related Questions
What is the Molarity and Normality of the ferrous ammonium salt ? For exam....196 gm (initial)

what do you understand by demographic window acess by india

The market structure in the south African mobile telecommunications industry

INTERNATIONAL MONETARY FUND: The important objectives before the Fund presently are as follows: • To promote international cooperation; • To facilitate the expansion and ba

Q. Explain about Neoliberalism? Neoliberalism: A modern, harsher incarnation of capitalism that became dominant globally beginning in early 1980s, largely as a reaction to inte

What are economies of scale and diseconomies of scale?  In economics, returns to scale and economies of scale are terms that are related and sometimes incorrectly used intercha

Ask qIf the supply and demand curves for labor are represented by the following equations: Wd= -- (1/100)Ld + 30 Ws= (1/200)Ls Ws=Wd Ld=Ld a. Graph the results and show the equili

Use standard indifference curve analysis to demonstrate whether the following statement is true or false. If the objective of government welfare programs is to provide lower inc

Q. Explain abput Capitalist Class? Capitalist Class:Group of individuals (which represents just a couple of percent of population in advanced capitalist countries) which contro

discuss african traditional methods of production and processing of food