Homework Help is Here – Start Your Trial Now!
Business
Economics
Price 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 the most elastic demand? O Thumbtacks O Fish food O Monthly cell phone bill 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 Beverages Wine Merlot The price elasticity of demand is also affected by the given time horizon. If the price of gasoline is relatively high for a long time, consumers are more likely to buy fuel-efficient cars or svitch to alternatives such as public transportation. Therefore, the demand for gasoline is elastic in the short run than in the long run.

Price 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 the most elastic demand? O Thumbtacks O Fish food O Monthly cell phone bill 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 Beverages Wine Merlot The price elasticity of demand is also affected by the given time horizon. If the price of gasoline is relatively high for a long time, consumers are more likely to buy fuel-efficient cars or svitch to alternatives such as public transportation. Therefore, the demand for gasoline is elastic in the short run than in the long run.

Principles of Microeconomics
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter5: Elastic And Its Application
Section: Chapter Questions
Problem 6PA: Suppose that your demand schedule for DVDs is as follows: Price Quantity Demanded (income = 10,000)...
See similar textbooks
icon
Related questions
Question
Price 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 the most elastic demand? Thumbtacks O Fish food Monthly cell phone bill 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 Beverages Wine Merlot The price elasticity of demand is also affected by the given time horizon. If the price of gasoline is relatively high for a long time, consumers are more likely to buy fuel-efficient cars or svitch to alternatives such as public transportation. Therefore, the demand for gasoline is elastic in the short run than in the long run.
Transcribed Image Text:Price 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 the most elastic demand? Thumbtacks O Fish food Monthly cell phone bill 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 Beverages Wine Merlot The price elasticity of demand is also affected by the given time horizon. If the price of gasoline is relatively high for a long time, consumers are more likely to buy fuel-efficient cars or svitch to alternatives such as public transportation. Therefore, the demand for gasoline is elastic in the short run than in the long run.
4. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand: • Availability of close substitutes • Whether the good is a necessity or a luxury • Whether the good is broadly defined • The proportion of a consumer's budget spent on the good • Time people have to adapt to new price changes A good without any close substitutes is likely to have relatively demand, because consumers cannot easily switch to a substitute good 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 Price 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 the most elastic demand? Thumbtacks Fish food O Monthly cell phone bill
Transcribed Image Text:4. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand: • Availability of close substitutes • Whether the good is a necessity or a luxury • Whether the good is broadly defined • The proportion of a consumer's budget spent on the good • Time people have to adapt to new price changes A good without any close substitutes is likely to have relatively demand, because consumers cannot easily switch to a substitute good 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 Price 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 the most elastic demand? Thumbtacks Fish food O Monthly cell phone bill
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
Recommended textbooks for you
Principles of Microeconomics
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics 2e
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
SEE MORE TEXTBOOKS