For a particular good, a 5 percent increase in price causes a 2 percent decrease in quantity demanded. Which of the following statements is most likely applicable to this good?
A. There are many close subsitutes for this good.
B. The good is a luxury.
C. The market for the good is broadly defined.
D. The relevent time horizon is long.
Here, the percentage increase in the price is less than the percentage decrease in the quantity demanded of the good. This means the good has inelastic demand. We can infer that the market for the good is broadly defined.