Economnics Disucussion 2

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Economics

Description

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.

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Explanation & Answer

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.

  • 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.


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