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

Market structure, illustrate and discuss implications of various market str...

illustrate and discuss implications of various market structure(non competitive and competitive) for price determination

Game theory, Characteristics of prisoners dilemma

Characteristics of prisoners dilemma

Assuming the price elasticity, Assume the United States exports 1000 comput...

Assume the United States exports 1000 computers at a price of $3000 each and imports 15 UK autos at a price of 10000 pounds each. Assume that the dollar/pound exchange rate is $2 p

Q=8L^1/2, what is the profit maximising quantity of L

what is the profit maximising quantity of L

Consumption theory, brief explain of keynesian consumption theory

brief explain of keynesian consumption theory

Economics, Economics- Definition Economics is the study of how societie...

Economics- Definition Economics is the study of how societies utilize limited resources to make valuable commodities and allocate them among diverse people. Microeconomics h

Production, who is a rational producer?

who is a rational producer?

The market supply of labour, graphical illustration describing the influenc...

graphical illustration describing the influence of an increase in immigrants on the market supply of labour

Cost in the short run, Cost in the Short Run Marginal Cost (or MC) is t...

Cost in the Short Run Marginal Cost (or MC) is the cost of expanding output by one unit.  As fixed costs have no impact on marginal cost, it can be given as: Average Total

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