There are 4 factors that influence the price elasticity of demand:
- 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
In a 2–4 paragraph Discussion Board post, discuss the following:
- Choose a product you have purchased in the past month from a clothing or shoe store.
- Describe how each of the 4 factors contributed to the elasticity of the good.
- Is the product considered elastic, inelastic, or unitary elastic?
- In a few sentences, what effect does the current supply and current demand have on this product?
- Comment on another student’s posting.
|1-2 page Word document|
Suppose you are a painter, and the price of a gallon of paint increases from $3.00 a gallon to $3.50 a gallon. Your usage of paint drops from 35 gallons a month to 20 gallons a month. Perform the following: