Identify three separate things that you personally have purchased in the past mo

Question

Identify three separate things that you personally have purchased in the past month. Now, for each of those goods answer this question: If the price had been 50% higher would I still have bought that thing? Or would I have said “No, I won’t pay this higher price.”

Now, tie your answers to what you know about elasticity. Was your demand for these products elastic or inelastic (remember if the price was higher and you’d buy the same amount your demand is inelastic.) What was it about each of these products that made your demand for them elastic or inelastic?

Explanation / Answer

You do not need to use these examples exactly, but just make sure the idea is the same... Eyeglasses: I paid $100 for a pair of eyeglasses. If they were $150, I still would have purchased these eyeglasses. This means my demand for eyeglasses is inelastic. This is due to my high willingness to pay for the ability to see, yet needing only one quantity to fulfill my demand. Therefore, I would be willing to pay a great deal of money for one pair of eyeglasses, meaning my demand is highly inelastic. Movie: I paid $20 for a DVD last month. I would not have paid $30 for the movie, meaning my demand for this movie is elastic. The reasoning for this is there are many substitutes for this movie and I could find something of equal enjoyment for around the same price of $20. New pants: I paid $50 for a new pair of pants, but would not have paid $75. This means my demand is elastic. While I need pants to act as clothing, the higher price makes me more likely to wear my current pairs for longer.

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