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The following are some characteristics of a good with a highly elastic demand except: A

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The following are some characteristics of a good with a highly elastic demand except:

A. it has close substitutes

B. it is addictive in nature

C. it is unnecessary

D. it has a low adjustment cost in consumption

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The correct option is: A. it has close substitutes

One of the factors that affect the price elasticity of demand is the availability of substitutes. If a good has a wide range of close substitutes, then its demand will be highly responsive to changes in the price since the consumers can easily shift to the consumption of the substitutes following a price increase.