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Price elasticity of demand - Essay Example

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In such cases, if there occurs and increase in one of the possible substitutes, consumers will switch to the next available substitute that is…
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Price elasticity of demand
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Price elasticity of demand

Download file to see previous pages... However, if the product in question satisfies other luxurious wants such as entertainment and swimming pools, then its price elasticity of demand will be elastic.
Time elapsed since price change; if it is in the short run, the price elasticity of that given product will be inelastic because consumers do not have adequate time to respond to such a price change. If it is in the long run, the price elasticity of such goods will be elastic, ceteris paribus since consumers will have enough time to respond to such price changes that my involve switching to the immediate substitutes which are relatively cheaper or even abandon the product completely, if it is not a necessity (Mankiw 91).
Cookie dough ice cream; there are many varieties of ice creams and thus, their price elasticity of demand is elastic. It does not also fall under the class of necessities, hence, making it price ...Download file to see next pagesRead More
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