Respuesta :
a. The demand for salt is price inelastic. This is because salt is considered a necessity in making meals.
b. The demand for new cars is price elastic. This is because there are many substitutes for new cars. For example, the bus is a substitute for a new car.
c. The demand for pork chops is price elastic. This is because there are many other types of foods that can be consumed instead of pork chops.
d. The demand for European vacation is price elastic. This is because vacations are not a necessity; they are a luxury.
e. The demand for Insulin is price inelastic. This is because insulin is very important to a diabetic patient
f. The demand for Insulin at one of four drug stores in a shopping mall is price inelastic. This is because consumers have choices between the four drug stores in the mall
g. The demand for gasoline purchased one day after a 20 percent price increase is price inelastic. This is because in the short run, consumers do not have enough time to search for suitable substitutes, so demand would be inelastic
h. The demand for gasoline purchased one year after a 20 percent price increase is price elastic. This is because in the long run, consumers would have enough time to find suitable substitutes.
Demand is price elastic if the quantity demanded of a good is sensitive to small changes in the price of the good
Demand is considered inelastic if the quantity demanded of a good is less sensitive to changes in the price of a good.
Factors that affect the price elasticity of demand
- Time frame: demand is inelastic in the short run because consumers would not have enough time to find cheaper substitutes. In the long run, demand is elastic because consumers would have enough time to search for substitutes.
- Number of close substitutes : If there are many substitutes for a good, the demand for the good would be elastic. If there are no close substitutes, the demand for the good would be inelastic
- Nature of the good: if the good is considered a necessity, the demand for the good would be inelastic and if the good is considered a luxury, the demand for the good would be inelastic.
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