Question

First, give an example of a product or service that you purchased in the last year for which your demand is relatively

inelastic. You should explain what factors influenced why your demand for the selected product or service was inelastic.

Be as specific as possible in your explanation. You may wish to review the factors influencing the elasticity of demand for

a product to assist you in your explanations.

Second, give an example of a product or service that you purchased in the last year for which your demand is relatively

elastic. You should explain what factors influenced why your demand for the selected product or service was elastic.  

Be as specific as possible in your explanation. You may wish to review the factors influencing the elasticity of demand

for a product to assist you in your explanations.

Describe why such information concerning the price elasticity of demand would be of interest to the firms selling these

products and services. Do you think it is fair for firms to use information concerning the elasticity of demand for their

products in their pricing decisions? How might they use this information in their pricing decisions?   

Answer 1

Ans

MEDICINES are among one of the product for which the demand for consumers is inelasti c as it is a NECESSARY GOOD ?and consumer can not survive withou taking medicine hence demand for it is inelastic,

LUXURY GOODS ?like car, jeweller etc have elastic demand because their demand changes with changes with income level of consumer and their prices.

Information concerning the price elasticity of demand is interest to the frims selling these products and services because they had to determine the prices of their products according to this information.

At times it is fair to use information when the pricins is not about the necessary goods