The price of cranberry juice suddenly increases. As a result, Glenda begins drinking more grape juice, which is less expensive, but tastes just as good to her. In this case, Glenda’s elastic demand is due to
A. availability of substitutes.
B. relative importance.
C. necessities versus luxuries.
D. change over time
I know its A
I'll be glad to check your answer.
The correct answer is A. availability of substitutes.
Elasticity of demand refers to how consumers respond to changes in price. When the price of a product increases, and consumers are able to easily switch to a substitute product, their demand becomes more elastic. In this case, Glenda can easily switch from cranberry juice to grape juice, which is less expensive but still satisfies her taste preferences. This indicates that her demand for cranberry juice is elastic because there is a readily available substitute.
To understand this concept on your own, you can examine the availability of substitutes for a particular product. If there are many substitutes that consumers can easily switch to, then the demand for the original product is likely to be more elastic. On the other hand, if there are few substitutes or if they are not easily accessible, the demand for the original product is likely to be less elastic.