Question

1. Go online and find one item you think is price elastic and one that you think is price inelastic

2. Do you feel the Government should regulate the market for either or both of these items? Explain

Answer 1

Ans. 1.

One item that is price elastic is car, price elastic means that when the price of the car increases the quantity demanded will decrease.

One item that is price inelastic is the gas/fuel , and it is inelastic because even when the price increases the demand of this product stays the same , as car owners will need this item , for its car to run.

Ans. 2.

I think government should regulate both the market because they can make the price of cars not to inflate and make them more environmental friendly by adding some emission regulation and also making compnaies to make fuel efficient cars.And in case of gas / fuel , government should regulate this market in such a way , that price hike of these product should be limited and also to ensure that supply of this product is sufficient in the market.

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