The demand for Gold Toe socks is likely to be more elastic than the demand for power tools because:

a. Power tools, in general, are more expensive than Gold Toe socks.

b. Gold Toe socks have more substitutes than power tools in general.

c. Power tools, in genera,l have more substitutes and Gold Toe socks.

d. Gold Toe socks are more expensive than power tools in general.

The demand for Gold Toe socks is likely to be more elastic than the demand for power tools because:

The correct answer is b. Gold Toe socks have more substitutes than power tools in general.

The availability of more purchasing options suggests that consumers may react more strongly to small pricing changes and consider switching from Gold Toe socks to another brand. Socks, in general, represent a more routine need than power tools and are more likely to be elastic when prices are discounted or reduced. Larger price reductions of power tools are not likely to trigger significant changes in demand and will have an inelastic effect on demand.

Answer a is incorrect. The majority of power tools will be significantly more expensive than socks and are viewed as investments or commodities. Socks are more common and routine purchase.

Answer c is incorrect. The industry for power tools is competitive, however, not as extensive as the sock industry which has many competitors and different niches offering varying prices, styles, and quality.

Answer d is incorrect. This statement is not true as Gold Toe socks are highly unlikely to be more expensive than power tools.