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Pick a product or service that you consume on a regular basis and speculate on what...

Pick a product or service that you consume on a regular basis and speculate on what the elasticity of demand might be for that product. What might be the income elasticity of demand for that product? Explain and support why you think the product has the elasticity that it does based on how price sensitive you think people are when it comes to this product or service.

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Answer #1

I pick up the example of toothpaste.

The elasticity of toothpaste is less than one.

In fact it is almost inelastic.

Because it is a necessary good and it require on the daily basis, so consumer doesn't care about it price generally.

Because whatever would be the price of it, consumer has to consume it.

The demand of the paste vary, very less with the change in price.

Income elasticity of the demand for paste is zero.

Price elasticity of the demand for the past is also zero.

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