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Economics

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Subject
Economics
School
East Tennessee State University
Type
Homework
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Running Head: ECONOMICS 1
Economics
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Name
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ECONOMICS 2
Economics
Question One
According to research, the demand elasticities of demand are always negative as the price
and quantity demanded always move in the opposite direction of the demand curve. For instance,
a change in the price of a product by an increase will result in lesser demand as only a few
people have the required resources to access this product (Lévy-Garboua, L., & Montmarquette.,
2011). However, one important factor in understanding is that own price elasticity will not
always be negative. In some cases, it might be positive with the increase in demand increasing
with the prices of the product increases.
Question Two
This statement is true. There are different factors that affect own price elasticity of
demand and include; the availability of substitute products, the time taken since the prices were
modified, the quality of the good; for instance, is it a luxury or a necessity and thirdly, the
income proportion spent on the good. Countries have different incomes per capita, which
influences the purchasing power of the citizens.

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1 Running Head: ECONOMICS Economics Institutional Affiliation Name Date 2 ECONOMICS Economics Question One According to research, the demand elasticities of demand are always negative as the price and quantity demanded always move in the opposite direction of the demand curve. For instance, a change in the price of a product by an increase will result in lesser demand as only a few people have the required resources to access this product (Lévy-Garboua, L., & Montmarquette., 2011). However, one important factor in understanding is that own price elasticity will not always be negative. In some cases, it might be positive with the increase in demand increasing with the prices of the product increases. Question Two This statement is true. There are different factors that affect own price elasticity of demand and include; the availability of substitute products, the time taken since t ...
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Really useful study material!

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