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Q1 1.5-2/2 = 25% - Price 10-7/7 = 42.86% - Quantity 42.86% / 25% = 1.714 make is elastic because penury dos more(prenominal) than professional rata to a deepen in harm. Q2 2010 Price 1.25 2011 - Price 1.50 deepen in Price = 1.25-1.50/1.50 = 20% Change in bring = 4.3% a. 4.3% / 20% = .215 = Demand is inelastic b. When ingest is inelastic a spread out in price leads to a deepen in agree revenue c. The time period allowed pastime a price change make is more price elastic, the longer that consumers adjudge to respond to a price change. They have more time to depend for cheaper substitutes and switch their spending.?? Q3 a) Drugs Price -100 Demand 100 Drugs Price two hundred Demand 90 Computers - 100 Demand 100 Computers 200 Demand 20 Computers would undergo the highest quantity change because for elastic wells demand responds more than proportionately to a change in price. As the price for computers doubles, t he demand for the good will shrink at a disproportionally great rate. b) Examples of inelastic goods would allow gaseous state, tobacco and automobiles. This is because in that location is lack of block subsitutes in the market. In the incident of gasoline and automobiles, these items are necessities for more or little people.

In the case of tobacco, the habitual nature of its use makes consumers less sensitive to the price of the good. Finally, these goods are broadly delineate. Examples of elastic goods would include Ford Automobilies, restaurant meals, Pepsi. Because these goods or more narrowly defined they have more close subsitutes, which makes demand more e lastic. Restaurant meals and Pepsi are s! ome(prenominal) closer to the luxury spectrum for most people. Q4 The resultant role is b or inelastic demand. As the price of the good goes up, the demand for the good remains constant. This graph and table would be like to what one might see for a medicine or medicine, as in question 3. Q5 The answer is a or elastic. The more close substitutes...If you want to get a effective essay, order it on our website: OrderEssay.net

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