eco week 2 discussion 1.docx

eco week 2 discussion 1.docx - Analyze the determinants of...

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Analyze the determinants of the price elasticity of demand and determine if each of the following products are elastic or inelastic: Bottled water Toothpaste Cookie dough ice cream Fresh green beans Gasoline In your analysis, please make sure to explain your reasoning and relate your answers to the characteristics of the The idea behind price elasticity of demand is fairly straight forward. Basically, if price rises significantly for a product, will demand change, especially in the short term? If rising prices tend to cause a change in demand, then it is elastic in nature. If rising prices don't tend to cause a change in demand then it is inelastic. Bottled water - I believe this is elastic in nature. While I like bottled water, most would agree it is not a necessity. Tap water is readily safe and available in the United States and costs a fraction of the price of bottled water. If prices rise, most people will simply buy less bottled water.
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