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Factors that Contribute to the Elasticity

Explain the factors that contribute to the elasticity of goods:
1-discuss in detail the influences of price elasticity of demand
2-explain the factors that contribute to the elasticity of goods
3-discuss how these factors influence consumers to purchases goods or services
4-explain how price elasticity of demand relates to microeconomics
5-give a real life example of a good that shows elasticity of demand
6-incorporate the real life example into your discuss
7-explain if the good is elastic, inelastic, or unitarily elastic and why

900 word essay

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For your essay you will need to begin with an introduction that describes your topic. You could begin with a brief definition of price elasticity of demand, such as "The elasticity of demand (POeD) measures how much quantity demanded by consumers changes with changes in price. A high elasticity of demand indicates that consumers are very responsive to price changes, while low elasticity (inelasticity) indicates the opposite." Then describe how examples are critical to understanding this concept, so you will be using examples of goods to demonstrate the factors that influence PEoD and how consumers react to these factors. Lastly, you will discuss how PEoD is related to the field of microeconomics.

There are five primary determinants of the price elasticity of demand. Firstly, there is the amount of income the consumer spends on that particular good. If the good only represents a very small expenditure, consumers are no likely to balk at spending slightly more. Second, it depends on how many substitutes are available for that particular good. If hamburgers became very expensive, consumers could substitute some other type of meat such as hot dogs. On the other hand, a prescription drug for a particular conditional might not have any substitutes. Thirdly, consumers are not likely to stop using goods that are ...

Solution Summary

The factors that contribute to the elasticity and real life examples