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6. Determinants of price elasticity of demand Consider some determinants of the price elasticity of demand: The availability of substitutes • The market used to measure demand • The share of budget spent on the product • The time horizon being considered A good without any close substitutes is likely to have relatively the price of the good rises. The price elasticity of demand for a good also depends on how broadly the good is defined. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have a demand elasticity that falls in between. Categories Most Elastic In Between Least Elastic Beverages Wine Merlot demand, because consumers cannot easily switch to a substitute good if Price elasticity for a good also depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has the most elastic demand? TV and Internet service plan Lightbulbs Toothbrush The price elasticity of demand is also affected by the given time horizon. Compared to the short-run demand for oil, the demand for oil in the long run will tend to be elastic.

6. Determinants of price elasticity of demand Consider some determinants of the price elasticity of demand: The availability of substitutes • The market used to measure demand • The share of budget spent on the product • The time horizon being considered A good without any close substitutes is likely to have relatively the price of the good rises. The price elasticity of demand for a good also depends on how broadly the good is defined. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have a demand elasticity that falls in between. Categories Most Elastic In Between Least Elastic Beverages Wine Merlot demand, because consumers cannot easily switch to a substitute good if Price elasticity for a good also depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has the most elastic demand? TV and Internet service plan Lightbulbs Toothbrush The price elasticity of demand is also affected by the given time horizon. Compared to the short-run demand for oil, the demand for oil in the long run will tend to be elastic.

ECON MICRO
ECON MICRO
5th Edition
ISBN:9781337000536
Author:William A. McEachern
Publisher:William A. McEachern
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 4.9P: (Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of...
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6. Determinants of price elasticity of demand Consider some determinants of the price elasticity of demand: The availability of substitutes • The market used to measure demand • The share of budget spent on the product • The time horizon being considered A good without any close substitutes is likely to have relatively the price of the good rises. The price elasticity of demand for a good also depends on how broadly the good is defined. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have a demand elasticity that falls in between. Categories Most Elastic In Between Least Elastic Beverages Wine Merlot demand, because consumers cannot easily switch to a substitute good if Price elasticity for a good also depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has the most elastic demand? TV and Internet service plan Lightbulbs Toothbrush The price elasticity of demand is also affected by the given time horizon. Compared to the short-run demand for oil, the demand for oil in the long run will tend to be elastic.
Transcribed Image Text:6. Determinants of price elasticity of demand Consider some determinants of the price elasticity of demand: The availability of substitutes • The market used to measure demand • The share of budget spent on the product • The time horizon being considered A good without any close substitutes is likely to have relatively the price of the good rises. The price elasticity of demand for a good also depends on how broadly the good is defined. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have a demand elasticity that falls in between. Categories Most Elastic In Between Least Elastic Beverages Wine Merlot demand, because consumers cannot easily switch to a substitute good if Price elasticity for a good also depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has the most elastic demand? TV and Internet service plan Lightbulbs Toothbrush The price elasticity of demand is also affected by the given time horizon. Compared to the short-run demand for oil, the demand for oil in the long run will tend to be elastic.
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