A good\'s price elasticity of demand depends in part on how necessary it is rela

Question

A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? O Amputation procedures for diabetes sufferers O Sports car The price elasticity of demand for a good also depends on how you define the good. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between. Between Least Elastic Categories Most Elastic In Wine Merlot Beverages The price elasticity of demand is also affected by the given time horizon. Compared to the short-run demand for oil, the demand for oil in the long run will tend to be Y elastic.

Explanation / Answer

Ans: Amputation procedure for diabetes sufferers

Explanation:

In case of medical treatment, price is not a major a factor.But when people purchase a luxury good, such as a sports car, the price of the good and the prices of the substitute goods will be major factors in the purchasing decisions.

Thus, the elasticity of demand for Amputation procedure for diabetes sufferers is much lower than the elasticity of demand for sports car.

Wine: Least Elastic

Mariot: In between

Beverages: Most Elastic

Explanation:

The overall category of Wine has no close substitutes. So, wine has least elastic demand. Beverages has many substitutes. So it has most elastic demand. Meriot has in between demand.

Ans to the blank: more

Explanation:

Since More substitutes are available in the long run than in the short run, therefore, demand for oil is more elastic in long run.

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.