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Economic Definition of substitute availability. Defined.

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Term substitute availability Definition: One of three elasticity determinants (time period and budget proportion are the other two) stating that the elasticity of a good tends to be greater for a goods that have more close substitutes available. In other words, the price elasticity of demand for OmniCola (which has many very close beverage substitutes available) is greater than that for a gasoline (which has very few substitutes available). This elasticity determinant works for both the price elasticity of demand and the price elasticity of supply. For demand, we are concerned with the availability of substitutes-in-consumption and for supply we are concerned with the availability of substitutes-in-production.

 

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