200 WORD MINIMUM
Price elasticity of demand measures consumers’ responsiveness to changes in the price of a good. There are a number of variables that affect consumers’ decisions, among them the following:
- The availability of substitutes
- The specific nature of the good
- The part of income spent on the good
- The time consumers have to buy the good
Please draw on your experiences as a consumer and your Unit 2 readings to address the following 4 topics. Make sure you use economic concepts in your main contribution.
- Choose a product that you have purchased in the past 1–3 months from a clothing or shoe store.
- Describe how each of the 4 factors listed above contributed to the elasticity of the good.
- Is the product considered elastic, inelastic, or unitary elastic?
- What effect does the current supply and current demand have on this product?