Sort the following determinants of price elasticity of demand. Which ones make goods and services more elastic and which ones make goods and services
Sort the following determinants of price elasticity of demand. Which ones make goods and services more elastic and which ones make goods and services
More inelastic
Homework Answers
More Inelastic:
The good is a necessity
When few substitutes exist for a good
A broad market category of goods
More Elastic:
When looking at demand in the long run
The good is a larger share of the consumer budget
Demand becomes more inelastic when there are necessity goods or few substitutes available. It is the characteristics of broad market category of goods.
Demand becomes elastic when people have longer time to readjust or goods constitute the bigger share of the budget. Then, people try to substitute it to manage their budget.
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Sort the following determinants of price elasticity of demand. Which ones make goods and services more elastic and which ones make goods and services
5. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of...
5. Determinants of the price elasticity of demand
Consider some determinants of the price elasticity of
demand:
• The availability of close substitutes
• Whether the good is a necessity or a luxury
• How broadly you define the market
• The time horizon being considered
A good with many close substitutes is likely to have relatively
__(Elastic, Inelastic)___ demand since consumers can easily choose
to purchase one of the close substitutes if the price of the good
rises.
A...
Determinants of the price elasticity of demand Consider some determinants of the price elasticity of...
Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand: The availability of close substitutes . Whether the good is a necessity or a luxury How broadly you define the market . The time horizon being considered A good with many close substitutes is likely to have relatively _______ demand, since consumers can easily choose to purchase one of the close substitutes if the price of the good rises A good's price elasticity of demand depends in part on how necessary...
9. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of...
9. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand: The availability of close substitutes Whether the good is a necessity or a luxury How broadly you define the market . The time horizon being considered A good with many close substitutes is likely to have relatively _______ demand, since consumers can easily choose to purchase one of the close substitutes if the price of the good rises. A good's price elasticity of demand depends in part on how necessary...
Consider some determinants of the price elasticity of demand: • Availability of close substitutes • Whether...
Consider some determinants of the price elasticity of demand: • Availability of close substitutes • Whether the good is a necessity or a luxury • Whether the good is broadly defined • The proportion of a consumer's budget spent on the good • Time people have to adapt to new price changes A good without any close substitutes is likely to have relatively(elastic or inelastic)demand, because consumers cannot easily switch to a substitute good if the price of the good...
By considering the determinants of the price elasticity of demand, explain whether the demand for air...
By considering the determinants of the price elasticity of demand, explain whether the demand for air travel is price elastic or price inelastic. You may consider both the business travelers and the leisure travelers when analysing their price elasticities of demand.
•Evaluate the elasticity of demand for your product by applying a minimum of two elasticity determinants. Does your product likely have an elastic or inelastic demand based upon your evaluation of fac...
•Evaluate the elasticity of demand for your product by applying a minimum of two elasticity determinants. Does your product likely have an elastic or inelastic demand based upon your evaluation of factors influencing the price elasticity of demand? How will considering these elasticity determinants impact product revenue?
Identify the factors that affect price elasticity of demand and supply. Add more products or services...
Identify the factors that affect price elasticity of demand and supply. Add more products or services to those given in Table 4.2 (p. 125). Fill in the table below: For a poor family For a wealthy family 2 commodities that have elastic demands 2 commodities that have elastic demands 2 commodities that have inelastic demands 2 commodities that have inelastic demands Are there any differences between the two families? Why? What is the elasticity of illegal goods? For sin products,...
Demand is more elastic: a. in the short run than in the long run. b. for...
Demand is more elastic: a. in the short run than in the long run. b. for goods with many substitutes than for goods with only a few. c. for goods with no substitutes. d. for necessities than for luxuries. e. for broadly defined goods than for narrowly defined ones. All other things constant, if a _____ proportion of a consumer’s budget is spent on a good, the demand for the good will be more _____ and a consumer will purchase...
Consider some determinants of the price elasticity of demand: . The availability of close substitutes Product's...
Consider some determinants of the price elasticity of demand: . The availability of close substitutes Product's share of the consumer's total budget A good with many close substitutes is likely to have relatively substitutes if the price of the good rises demand, since consumers can easily choose to purchase one of the close The price elasticity of demand for a good depends on the price of the good relative to consumers' incomes. Which of the following goods has the most...
2. Characterize the demand for each of the following goods or services as relatively price elastic...
2. Characterize the demand for each of the following goods or services as relatively price elastic in demand or relatively price inelastic with respect to demand and explain why: a. A lifesaving medicine b. Photocopies at a copy shop when there are other copy shops near by c. The water you buy from the local utility company d. Flights to Cancun
5. Determinants of the price elasticity of demand
Consider some determinants of the price elasticity of
demand:
• The availability of close substitutes
• Whether the good is a necessity or a luxury
• How broadly you define the market
• The time horizon being considered
A good with many close substitutes is likely to have relatively
__(Elastic, Inelastic)___ demand since consumers can easily choose
to purchase one of the close substitutes if the price of the good
rises.
A...
Consider some determinants of the price elasticity of demand: . The availability of close substitutes Product's share of the consumer's total budget A good with many close substitutes is likely to have relatively substitutes if the price of the good rises demand, since consumers can easily choose to purchase one of the close The price elasticity of demand for a good depends on the price of the good relative to consumers' incomes. Which of the following goods has the most...
2. Characterize the demand for each of the following goods or services as relatively price elastic in demand or relatively price inelastic with respect to demand and explain why: a. A lifesaving medicine b. Photocopies at a copy shop when there are other copy shops near by c. The water you buy from the local utility company d. Flights to Cancun
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