All of the following would cause demand to be more inelastic except:
A. Urgent consumer need
B. The price is a small fraction of the consumers income
C. Lack of substitutes
D. Many substitutes
To determine which of the options would cause demand to be more inelastic, we need to understand the concept of demand elasticity. Demand elasticity refers to how sensitive the quantity demanded of a good or service is to changes in price.
When demand is elastic, it means that a small change in price leads to a relatively large change in quantity demanded. On the other hand, when demand is inelastic, it means that a change in price leads to a relatively smaller change in quantity demanded.
Now let's consider each option to determine which one would cause demand to be more inelastic:
A. Urgent consumer need: If there is an urgent consumer need for a product, it suggests that consumers require it regardless of price changes. This would make the demand for the product more inelastic since consumers would be less sensitive to price changes.
B. The price is a small fraction of the consumers' income: When the price of a product is a small fraction of the consumers' income, it indicates that consumers can easily afford it. In this case, even if the price increases, consumers may still continue to purchase the product, making the demand more inelastic.
C. Lack of substitutes: If there are no or very few substitutes available for a product, consumers have limited alternatives to choose from. This makes the demand for the product more inelastic since consumers cannot easily switch to other options in response to price changes.
D. Many substitutes: When there are many substitutes available for a product, consumers have more options to choose from. In this case, if the price of one product increases, consumers can easily switch to a substitute, making the demand for the original product more elastic.
Based on the explanations above, option D, "Many substitutes," would cause demand to be less inelastic. Having many substitutes gives consumers the flexibility to switch to alternatives, making their demand more elastic and sensitive to price changes. Thus, option D is the correct answer.