Question

unit 2 study guide
20 points: see rubric at end for scoring criteria
score:______
vocabulary (from crossword)
demand
supply
substitute
elastic
inelastic
consumer
producer
curve
schedule
cost of production
law of demand
law of supply
surplus
shortage
non - price factors
demand (ja text, ch 3)

1. describe the law of demand in your own words. what are some of the factors that might influence demand for a product or service?
2. how can substitute goods impact the demand for a popular product? are substitute goods an example of elastic or inelastic demand (and tell why)?

Explanation:

Substitute goods are products that can be used in place of one another. If the price of a popular product rises, consumers may switch to its substitute, reducing the demand for the popular product. Elastic demand means that a change in price leads to a relatively large change in quantity demanded. Substitute goods are an example of elastic demand because when the price of a good with substitutes changes, consumers can easily switch to alternatives, causing a significant change in the quantity demanded of the original good.

Answer:

Substitute goods can reduce the demand for a popular product when its price rises. Substitute goods are an example of elastic demand because consumers can easily switch to alternatives when prices change, leading to a relatively large change in quantity demanded.