Answered: Research has concluded that the price…

Economics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506725

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter20: Consumer Choice And Elasticity

Section: Chapter Questions

Problem 7CQ

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Research has concluded that the price elasticity of a soda bottle is lower at an airport than at a grocery store. List two reasons or determinants that explain this difference in elasticity.

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Elasticity of demand is the per cent change in quantity demanded due to 1 per cent change in price. It is calculated with a negative sign. Demand is perfectly elastic if elasticity of demand is infinite and perfectly inelastic if elasticity of demand is 0.

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