Which is likely to occur if there is a price increase for a good which exhibits elastic demand? a) people might buy a more expensive substitute good. b) people might buy a less expensive complementary good. c) people might buy a less expensive substitute good. d) people might buy a more expensive complementary good.

The correct answer is C.

According to the law of demand, there is an inverse relationship between price and quantity demanded. Therefore, when the price of a certain product rises the quantity demanded of this good by consumers decreases.

As the good has become more expensive, consumers will seek for alternatives to satisfy their needs which they can afford, therefore they would switch to relatively cheaper substitutes. A susbstitute is defined as a good that enables to satisfy the same need as another.