If Coke rise in price - consumers will begin considering Pepsi or RC Cola instead. Substitution leads to less demand. Elasticity of Demand 1. Some goods will be easily substituted for - this will lead to large changes in demand for small changes in its price. When this occurs one says that demand is Highly Elastic .
Some goods are difficult to substitute or impossible to substitute for.
This means that changes in price will have small or no effects on demand for the product. When this occurs one says that demand is Highly inelastic . C. Demand and Supply will equilibrate in a perfect market. This means that all demanded will be supplied. All supplied will be demanded.