For which of the two goods would you expect to bo more price elastic? WHY?
A. water or diamonds...
B. insulin or nasal decongestant spray..
C. food in general or breakfast cereal...
D. gasoline over the course of a week or gasoline over the course of a year...
E. personal computers or IBM personal computers...
2007-11-29 09:48:40 · 1 answers · asked by kujo7538 1 in Social Science ➔ Economics
The easier it is to do without a product, the more price-elastic that product is going to be.
http://en.wikipedia.org/wiki/Price_elasticity_of_demand
You have to eat, but if can't afford to buy prime beef for dinner every night, you will switch to cheaper meats or become vegetarian.
On the other hand, if it is a life-or-death matter, you will do everything you can to get the money to pay the price.
2007-12-01 18:12:50 · answer #1 · answered by simplicitus 7 · 0⤊ 0⤋