Closesubstitute goods, Microeconomics

Assignment Help:

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.


Related Discussions:- Closesubstitute goods

Explain nominal gdp, Q. Explain Nominal GDP? Nominal GDP: Nominal gross...

Q. Explain Nominal GDP? Nominal GDP: Nominal gross domestic product measures total value of all the services and goods produced and traded for money in the formal economy, eval

Determine the slutsky equation, Determine the Slutsky Equation. Income-...

Determine the Slutsky Equation. Income-Substitution Effect: The Slutsky Equation A fall into the price of a good may have two sorts of consequences: substitution effect, whe

Summary of educational financing, Normal 0 false false fals...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Measures to control inflation, Measures to control inflation: Fiscal po...

Measures to control inflation: Fiscal policy is one of the two main macroeconomic policies used to control aggregate demand and thereby achieve economic stability. Fiscal meas

Definition, the definition of exceptional supply curve

the definition of exceptional supply curve

Monopoly, if the inverse demand curve is p=120-Qand the marginal cost is co...

if the inverse demand curve is p=120-Qand the marginal cost is constant at 10, how does charging the monopoly a specific tax of 10 per unit affect the monopoly optimum and the welf

Macroeconomics, Real and nominal GDP, GNP, and Intrest rates, Stock & flow...

Real and nominal GDP, GNP, and Intrest rates, Stock & flow variables, Disinflation, Inflation rates, unemployement rates, labor force, participation rate, output per person, GDP d

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd