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For each of the following pairs of products determine which product is more own price elastic in...

Question:

For each of the following pairs of products determine which product is more own price elastic in demand, and identify the own price elasticity of demand determinant(s) involved.It is possible that there may be more than one relevant elasticity determinant. Note that elasticity determinants are not the same as demand determinants.

a. Honda Accords, passenger cars The product that is more elastic is .......... The own price elasticity of demand determinant(s) involved is/are .........

b. Foreign travel, rubber bands The product that is more elastic is ..........The own price elasticity of demand determinant(s) involved is/are .........

c. Christmas toys at Thanksgiving time, Christmas toys on Christmas Eve The product that is more elastic is .......... The own price elasticity of demand determinant(s) involved is/are ..........

d.Printers, bread The product that is more elastic is ..........The own price elasticity of demand determinant(s) involved is/are .............

Own Price Elasticity of Demand:

Own price elasticity of demand measures how much quantity of demanded responds to a change in price. The main determinant of own price elasticity of demand is the availability of substitute goods. If there are more substitutes, the more elastic the demand is.

Answer and Explanation:

a. Honda Accords is more own price elastic in demand than passenger cars. The own price elasticity of demand in any market depends on how broadly we...

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Price Elasticity of Demand in Microeconomics

from Economics 101: Principles of Microeconomics

Chapter 2 / Lesson 11
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