{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

2011-10-02 22-36-48 19

2011-10-02 22-36-48 19 - D Perfectly elastic t E Perfectly...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: D. Perfectly elastic t E. Perfectly inelastic i7 Q What determines the price elasticity of demand for a product? 0 Availability of close substitutes o Passage of time 1’06 (15500 Necessities versus luxuries -' “Elm-“:1 0 Definition of the market 0 Share of the good in the consumer’s budget Availability of close substitutes: If a product has more substitutes available, it will have more elastic demand. If a product has fewer substitutes available, it will have less elastic demand. Passage of time: The more time that passes, the more elastic the demand for a product becomes. Luxuries versus necessities: The demand curve for a luxury is more elastic than the demand curve for a necessity. ...
View Full Document

{[ snackBarMessage ]}