Which of the following best describes the relationship between the elasticity of demand and the availability of substitutes? A. The elasticity of demand will increase as the availability of substitutes decreases. B. The elasticity of demand will decrease as the availability of substitutes remains constant. C. The elasticity of demand will increase as the availability of substitutes increases. D. The elasticity of demand will remain constant as the availability of substitutes decrease.

To answer the question, let's break down the concepts involved:

1. Elasticity of Demand: This measures how much the quantity demanded of a good responds to a change in the price of that good. If demand is elastic, consumers will buy significantly less of the good if the price rises. If demand is inelastic, consumers will not reduce their quantity demanded by much if the price rises.

2. Availability of Substitutes: This refers to the presence of other goods that consumers can purchase instead of the good in question. If there are many substitutes available, consumers can easily switch to another product if the price of the original good increases.

Now, let's analyze each option:

A. The elasticity of demand will increase as the availability of substitutes decreases.

• If substitutes decrease, consumers have fewer alternatives to switch to if the price of the good increases. This would typically make demand less elastic, not more elastic.

B. The elasticity of demand will decrease as the availability of substitutes remains constant.

• If the availability of substitutes remains constant, there is no reason for the elasticity of demand to change. This statement does not accurately describe the relationship.

C. The elasticity of demand will increase as the availability of substitutes increases.

• If more substitutes are available, consumers can easily switch to another product if the price of the good increases. This makes the demand more elastic.

D. The elasticity of demand will remain constant as the availability of substitutes decreases.

• If substitutes decrease, the demand would typically become less elastic, not remain constant.

Based on the analysis, the correct answer is:

C. The elasticity of demand will increase as the availability of substitutes increases.