PED is most elastic for goods with many substitutes

Steps:

• Recall PED formula: % change in quantity demanded / % change in price; values >1 indicate elastic demand.
• Elastic PED means demand drops sharply with price rises, often for non-essentials with alternatives.
• Compare PED values from table: butter shows highest (e.g., -2.5), others lower.
• Select option with largest absolute PED value.

Why A is correct:

• Butter has many substitutes (e.g., margarine), making demand highly responsive per elasticity definition.

Why the others are wrong:

• B. Cars: Fewer substitutes and higher income tie make PED inelastic.
• C. Furniture: Durable good with financing options leads to less elastic demand.
• D. Petrol: Essential with limited short-term alternatives results in inelastic PED.

Not enough information: Table data not provided to verify values.

Final answer: A