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    Price Elasticity of Demand

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    You must post a memo which you explain the factors that contribute to the elasticity of goods. You must also incorporate a real-life example of price elasticity of demand, and discuss how it impacts the economy.

    * Discuss in detail the influences of price elasticity of demand.
    * Explain the factors that contribute to the elasticity of goods.
    * Discuss how these factors influence consumers to purchase goods or services.
    * Explain how price elasticity of demand relates to microeconomics.
    * Give a real-life example of a good that shows elasticity of demand.
    * Incorporate the real-life example into the memo.
    * Explain if the good is elastic, inelastic, or unitarily elastic. Why?

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    https://brainmass.com/economics/short-and-long-run-cost-functions/price-elasticity-of-demand-316686

    Solution Preview

    You must post a memo which you explain the factors that contribute to the elasticity of goods. You must also incorporate a real-life example of price elasticity of demand, and discuss how it impacts the economy.

    * Discuss in detail the influences of price elasticity of demand.
    As per economics.about.com, The Price Elasticity of Demand measures the rate of response of quantity demanded due to a price change.
    The formula for the Price Elasticity of Demand (PEoD) is:

    PEoD = (% Change in Quantity Demanded)/ (% Change in Price)

    Hence we must understand the following rules:

    * If PEoD > 1 then Demand is Price Elastic (Demand is sensitive to price changes)

    * If PEoD = 1 then Demand is Unit Elastic

    * If PEoD < 1 then Demand is Price Inelastic (Demand is not sensitive to price changes)

    * Explain the factors that contribute to the elasticity of ...

    Solution Summary

    Response explains price elasticity of demand

    $2.19

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