Is the price elasticity of demand for blue shirts greater or

Is the price elasticity of demand for blue shirts greater or less than the price elasticity of demand for all shirts? Explain. What does this imply about the price of blue shirts?

Solution

The price elasticity of demand for blue shirts must be greater than the price elasticity of all shirts.Blue shirts has got more substitutes in terms of the colour of shirts but shirts in general have not got a lot of substitutes.Greater the number of substitutes,higher the elasticity.Price of blue shirts would be lesser because it has higher elasticity.