2ndmortgageinfo.com

The narrower the definition of a product:?

chosentherightone - 2007-04-30 09:04:22 - Economics

The narrower the definition of a product: A) the larger the number of substitutes and the larger the price elasticity of demand. B) the smaller the number of substitutes and the larger the price elasticity of demand. C) the larger the number of substitues and the smaller the price elasticty of demand. D) the smaller of substitues and the smaller the price elastictity of demand.

---

Best Answer:

If you have a very restrictive definition of a product: for example, a non-stop flight from Boston to Houston around 4pm Saturday, are there many substitutes for it or few, as compared to defining your product as public transportation from Boston to Houston around the 5th of next month? And which is likely to make a product have lower price elasticity...having many substitutes or few?

Answers:

If you have a very restrictive definition of a product: for example, a non-stop flight from Boston to Houston around 4pm Saturday, are there many substitutes for it or few, as compared to defining your product as public transportation from Boston to Houston around the 5th of next month? And which is likely to make a product have lower price elasticity...having many substitutes or few?

---