In business and economics, elasticity refers to the degree to which individuals, consumers, or producers change their demand or the amount supplied in response to price or income changes. It is predominantly used to assess the change in consumer demand as a result of a change in a good or service's price Product Price elasticity Income elasticity Consumer durable goods 0.9 1.5 Foreign travel 1.8 3.3 Bread 0.1 -0.2 Milk 0.2 0.0 Fresh meat 1.4 0.0 Wine 1.2 2.6 Petrol (0.5 long run) (1.0, short run) 1.3 Beer 0.4 0.5 i. Explain the values of price and income elasticity of demand for Fresh meat, foreign travel, and Bread, Beer, petrol and consumer durables. ii. With reference to the price elasticity values comment on their implications for pricing policies in the industries concerned.
In business and economics, elasticity refers to the degree to which individuals, consumers, or producers change their demand or the amount supplied in response to price or income changes. It is predominantly used to assess the change in consumer demand as a result of a change in a good or service's price Product Price elasticity Income elasticity Consumer durable goods 0.9 1.5 Foreign travel 1.8 3.3 Bread 0.1 -0.2 Milk 0.2 0.0 Fresh meat 1.4 0.0 Wine 1.2 2.6 Petrol (0.5 long run) (1.0, short run) 1.3 Beer 0.4 0.5 i. Explain the values of price and income elasticity of demand for Fresh meat, foreign travel, and Bread, Beer, petrol and consumer durables. ii. With reference to the price elasticity values comment on their implications for pricing policies in the industries concerned.
Microeconomics A Contemporary Intro
10th Edition
ISBN:9781285635101
Author:MCEACHERN
Publisher:MCEACHERN
Chapter5: Elasticity Of Demand And Supply
Section: Chapter Questions
Problem 8QFR
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In business and economics, elasticity refers to the degree to which individuals,
consumers, or producers change their
response to
change in consumer demand as a result of a change in a good or service's price
| Product | Price elasticity | Income elasticity |
| Consumer durable goods |
0.9 | 1.5 |
| Foreign travel | 1.8 | 3.3 |
| Bread | 0.1 | -0.2 |
| Milk | 0.2 | 0.0 |
| Fresh meat | 1.4 | 0.0 |
| Wine | 1.2 | 2.6 |
| Petrol | (0.5 long run) (1.0, short run) |
1.3 |
| Beer | 0.4 | 0.5 |
i. Explain the values of
meat, foreign travel, and Bread, Beer, petrol and consumer durables.
ii. With reference to the price elasticity values comment on their
implications for pricing policies in the industries concerned.
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