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9 November, 03:11

The demand for Cheerios cereal is more price-elastic than the demand for cereals as a whole. This is best explained by the fact that:

A. Cheerios are a luxury

B. Cereals are a necessity

C. There are more substitutes for Cheerios than for cereals as a whole

D. Consumption of cereals as a whole is greater than consumption of Cheerios

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  1. 9 November, 06:58
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    C. There are more substitutes for Cheerios than for cereals as a whole

    Explanation:

    Since in the question it is given that the demand for Cheerios cereal is more price-elastic than the demand for cereals as a whole as because there are more substitutes for Cheerios as compare to cereals because in the case of substitute goods, there is a positive relationship between the price of good B and the demand of good A. It means if the price of good B decline. then the demand of good A is decreases and vice versa
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