Question

The demand for shoes in general will be _________________ than the demand for Nike shoes. A. more elastic. B. more inelastic. C. less elastic. D. less inelastic

Answer 1

Option C.

• The demand for shoes in general will be less elastic than the demand for Nike shoes.
• The Nike shoes are said to be more elastic in general when compared to other shoes. This is because Nike shoes is considered as a luxury while any normal shoe is a necessity.
• People purchase necessity goods even when their prices rise while people prefer purchasing less of a luxury good when it's price rises.
• Another factor which shows that nike shoes are more elastic is that, they have many close branded substitutes than any unbranded shoes. Goods with more close substitutes are relatively more elastic than other goods.
• Hence the demand for shoes in general will be less elastic than Nike shoes.