More substitutes are available in the long run than in the short run. The demand for insulin is relatively inelastic. As a result, an increase in the price of insulin will not lead to a noticeable decline in insulin consumption. By contrast, there are no close substitutes for insulin as a treatment for diabetes. Therefore, the demand for Coke is relatively elastic. Therefore, holding the price of Pepsi constant, if the price of Coke were to increase, many consumers would decide to switch to Pepsi. For example, many people believe that Coke and Pepsi are close substitutes for each other. If a good has several close substitutes, then many consumers will respond to an increase in the price of the good by purchasing one of those close substitutes. For example, if consumers change their purchasing behavior very little in response to a drastic change in price, demand is said to be inelastic but if consumers change their purchasing behavior a lot in response to a small change in price, demand is said to be elastic. The price elasticity of demand measures the responsiveness of consumers to changes in price.
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