D. Comment on the following questions.
Date: 2015-10-07; view: 575.
C. Study the table below.
1.Can the elasticity of demand be estimated by examining the answers to three key questions?
2. Do all three answers have to be the same in order to determine elasticity?
3. Can an answer to a single question be so important that it alone might override the answers to the other two?
4.What is the demand for a product likely to be if the answer to the question “Can the purchase be delayed?” is yes? What is the demand if the answer to the question is no?
5. If you applied the three questions to a luxury product, what would be the elasticity of demand for that product?
6. Can you think of other goods with inelastic demand? Why is the demand for those goods inelastic?
7.How do consumers react to price changes on products with elastic, inelastic, and unit elastic demand?
D.Based on the table above, create your own chart for the following products: an MP3 player, electricity, a gallon of milk, an ink pen, and a pound of onions. Explain.
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