EBK MODERN PRINCIPLES OF ECONOMICS
EBK MODERN PRINCIPLES OF ECONOMICS
3rd Edition
ISBN: 9781319030926
Author: COWEN
Publisher: YUZU
Question
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Chapter 5, Problem 1FT

Subpart (a):

To determine

The price inelasticity of demand.

Subpart (a):

Expert Solution
Check Mark

Explanation of Solution

Fruit is more likely to be in-elastically demanding. This is because fruit as a whole has fewer substitutes than any other item in the category of the fruits.

Economics Concept Introduction

Concept Introduction:

Price elasticity of demand: The price elasticity of demand is the responsiveness of the quantity demanded to a change in the price measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the price of the product.

Subpart (b):

To determine

The price inelasticity of demand.

Subpart (b):

Expert Solution
Check Mark

Explanation of Solution

Since the people are relatively inelastic or inflexible in a short run, demand for beef over the next month is more inelastic.

Subpart (c):

To determine

The price inelasticity of demand.

Subpart (c):

Expert Solution
Check Mark

Explanation of Solution

The demand for the gasoline in the entire city is more in-elastically demanding. This is because branded goods are more elastic than other categories. This implies very good substitutes for Exxon gasoline, which may be available at close distances whereas fewer substitutes may be available for the category of gasoline.

Subpart (d):

To determine

The price inelasticity of demand.

Subpart (d):

Expert Solution
Check Mark

Explanation of Solution

Insulin is more a necessity good for the buyers of insulin. This implies the demand for insulin from buyers is more inelastic than the demand for vitamins for the buyers of vitamins.

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