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C A foundation Economics Paper4 Part I Questions for practice


Q43) Commodities such as prescribed medicines and salt have __ and hence, have an __ demand.

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Correct

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Solution:
c) No close substitutes, inelastic.

Prescribed medicines and salt are essential commodities with no or few close substitutes. People need these items for their survival and well-being, so their demand is generally inelastic.
Even if the price of these commodities increases, people will continue to buy them because there are no good substitutes available.
However, if there were several substitutes available, then the demand would be more elastic because consumers could easily switch to other options if the price of one item increases.
Correct option is (c)