supply and demand elasticity

Economics
Tutor: None Selected Time limit: 1 Day

  • Identify two (2) elastic and two (2) inelastic goods that you have purchased in the last month and explain the main reason why you identified them as such. 
Jan 16th, 2015

I have bought a number of goods with inelastic demand lately.  Let me look at two of them here. 

First, I bought a container of salt.  It weighed 26 ounces and cost $.48.  The demand for this product is inelastic because it does not take up a significant portion of my budget.  If the price were to double, I could afford it just as easily as I can now and would surely not notice the difference.

Second, I bought a new air conditioner condenser for my car.  This did cost a lot of money.  However, demand for it would be inelastic even so.  This is because it is something that has no real substitutes.  Since I live in a place where it gets very hot in the summer, I need the air conditioner.  Goods with no substitutes typically have inelastic demand.

I have also bought things whose demand is elastic.  Let me look at two of them.

First, I bought a certain brand of whole wheat bread.  Demand for this is rather elastic because there are many kinds of substitutes for it.  I could have bought a different brand of bread.  I could have bought a different type of bread (for example, 7-grain bread or white bread). 

Second, I bought a pair of swimming trunks.  Demand for this would typically be elastic because this is not something that the average person needs right away.  People can easily afford to wait, as I did, until the item goes on sale.


Jan 16th, 2015

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