For a particular good, a 3 percent increase in price causes a 10 percent decrease in quantity demanded. Which of the following statements is most likely applicable 10 this good?

a. The relevant time horizon is short,

b. The good is a necessity,

c. The market for the good is broadly define,

d. There are many dose substitutes for this good.

Answer: D

Since quantity demanded fell more than three times price in percent terms, demand is very elastic. In general, the shorter the time horizon and broad the market, the lower elasticity is. Since elasticity is high we can say A and C are incorrect. A necessity will also likely have inelastic demand as people will still need it if prices rise. If people have multiple close substitutes and answer D suggests, then they can easily demand less quantity if prices rise and are more price sensitive. Thus D is correct.