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

Monopolistic competition maximizes, "A firm in monopolistic competition max...

"A firm in monopolistic competition maximizes its profit by producing where its price is equal to its marginal cost." Is this statement correct or incorrect?  Explain.

Explain about capacity utilization, Q. Explain about Capacity Utilization? ...

Q. Explain about Capacity Utilization? Capacity Utilization: A company or economy's capacity represents maximum amount of output it can produce. Rate of capacity utilization, h

Random sampling, Random sampling is a technique for sampling which we can s...

Random sampling is a technique for sampling which we can select a group of subjects or a sample for study from a larger group or a population. Each entity individually is chosen en

Private and social benefits, Private and Social Benefits Private benef...

Private and Social Benefits Private benefits are those which accrue to an individual. They may be both monetary and non monetary, direct and indirect. Earnings of an individua

Estimating labour productivity, Estimating Labour Productivity by Economic ...

Estimating Labour Productivity by Economic Sector for Target Year and its Change between Base and Target Year Contribution of each sector to GDP is known. The contribution of

Estimating and predicting cost, Estimating and Predicting Cost * Estima...

Estimating and Predicting Cost * Estimates of future costs can be obtained from a cost function, which relates cost of production to level of output and other variables which t

Poverty, Poverty: A state of having inadequate income or other resources to...

Poverty: A state of having inadequate income or other resources to support a household (or group of households) at a basic standard of living. Poverty can be measured in absoluterr

Explain the issue using a ppf, A country s choice among the production of e...

A country s choice among the production of education and nuclear submarines is an issue of opportunity cost. Explain the issue using a PPF. Resources are limited whereas

Stoichiometry , Mg(OH)2 + 2HCl-----> MgCl2 +2H2O how many grams of magnesiu...

Mg(OH)2 + 2HCl-----> MgCl2 +2H2O how many grams of magnesium chloride can be produced from 14.60mL of a 0.546M hydrogen chloride solution?

Determine the cost efficient levels of emissions reduction, Determine the C...

Determine the Cost Efficient Levels of Emissions Reduction Two firms produce a pollutant called Q.  The total cost of reducing emissions of Q are as follows for Firm 1 and Fir

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