Consider some determinants of the price elasticity of demand:•The availability of close substitutes•Whether the good is a necessity or a luxury•How broadly you define the market•The time horizon being considered A good with many close substitutes is likely to have relativelyelastic   demand, since 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 most elastic demand?Sports car Chemotherapy for cancer patients  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 elastic demand, and which will have demand that falls in between.CategoriesMost ElasticIn BetweenLeast ElasticClothing    Pants    Boot-cut jeans     The price elasticity of demand is also affected by the given time horizon.Other things being equal, the demand for natural gas will tend to be    elastic in the short run than in the long run.

Question
Asked Feb 22, 2020
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Consider some determinants of the price elasticity of demand:
The availability of close substitutes
Whether the good is a necessity or a luxury
How broadly you define the market
The time horizon being considered
 
A good with many close substitutes is likely to have relativelyelastic   demand, since 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 most elastic demand?
Sports car
 
Chemotherapy for cancer patients
 
 
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 elastic demand, and which will have demand that falls in between.
Categories
Most Elastic
In Between
Least Elastic
Clothing
 
 
 
 
Pants
 
 
 
 
Boot-cut jeans
 
 
 
 
 
The price elasticity of demand is also affected by the given time horizon.
Other things being equal, the demand for natural gas will tend to be    elastic in the short run than in the long run.
 
 
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A good with many close substitutes is likely to have relatively elastic demand.

 

 Necessary goods have comparative inelastic demand than luxury, chemotherapy for cancer patients is the necessary and they can’t avoid this treatm...

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