Aplia Homework: Elasticity of Demand and Supply4. Determinants of the price elasticity of demandConsider some determinants of the price elasticity of demand:• The availability of close substitutes• The proportion of a consumer's budget spent on the good• The time horizon being consideredA good with many close substitutes is likely to have relativelydemand, because consumers can easily choose to purchase one of the closesubstitutes if the price of the good rises.A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately thesame, which one has the least elastic demand?O Sports carO Chemotherapy for cancer patientsPrice elasticity for a good depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has themost elastic demand?O ThumbtacksO Monthly cell phone billO Fish food The price elasticity of demand for a good also depends on how you define the good.Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elasticdemand, and which will have demand that falls in between.CategoriesMost ElasticIn BetweenLeast ElasticRed bell peppersO.FoodVegetablesThe price elasticity of demand is also affected by the given time horizon.elastic in the short run than in the long run.Other things being equal, the demand for natural gas will tend to beGrade It NowSave & ContinueContinue without savingOCTátv S2537,63230MacBook Air

Hi, thank you for the question. As per the guidelines, we are allowed to attempt only first…

A good with many close substitutes is likely to have relatively demand, because consumers can easily choose to purchase one of the close substitutes if the price of the good rises. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? O Sports car O Chemotherapy for cancer patients

A good with many close substitutes is likely to have relatively demand, because consumers can easily choose to purchase one of the close substitutes if the price of the good rises. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? O Sports car O Chemotherapy for cancer patients

ECON MICRO

5th Edition

ISBN:9781337000536

Author:William A. McEachern

Publisher:William A. McEachern

Chapter5: Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 4.9P: (Other Elasticity Measures) Complete each of the following sentences: a. The income elasticity of...

See similar textbooks

Similar questions

Would you expect supply to play a more significant role in determining the price of a basic necessity like food or a luxury like perfume? Explain. Hint: Think about how the price elasticity of demand will differ between necessities and luxuries.
What is the formula for the income elasticity of demand?
A life-saving medicine without any close substitutes will tend to have a. a small elasticity of demand. b. a large elasticity of demand. c. a small elasticity of supply. d. a large elasticity of supply.
What is the formula for line cross-price elasticity of demand?
Income Effects depend on the income elasticity of demand for each good limit you buy. If one of the goods you buy has a negative income elasticity, that is, it is an inferior good, what must be true of the income elasticity of the other good you buy?
What is the price elasticity of demand? Can you explain it in your own words?
Economists define normal goods as having a positive income elasticity. We can divide normal goods into two types: Those whose income elasticity is less than one and those whose income elasticity is greater than one. Think about products that would fall into each category. Can you come up with a name for each category?
The equation for a demand curve is P=483Q. What is the elasticity in moving from quantity of 5 to a quantity of 6?
If supply is elastic, will shifts in demand have a larger effect on equilibrium quantity or on price?
Suppose the cross-price elasticity of apples with respect to the price of oranges is 0.4, and the price of oranges falls by 3. What will happen to the demand for apples?