When it comes to price and what we choose and what drivessales pls answer the qu

Question

When it comes to price and what we choose and what drivessales pls answer the questions below

1. Explain how increasing consumer price sensitivity affects thedemand curve. Are these consumers more price elastic or less priceelastic?
2. Explain how price elasticity of demand affects equilibriumquantity bought and sold when there is a change in demand.
3. How have consumers changed the way retailers set prices?

What impact has the Internet had on consumer purchase decisions?Has it made customers more price conscious? When it comes to price and what we choose and what drivessales pls answer the questions below

1. Explain how increasing consumer price sensitivity affects thedemand curve. Are these consumers more price elastic or less priceelastic?
2. Explain how price elasticity of demand affects equilibriumquantity bought and sold when there is a change in demand.
3. How have consumers changed the way retailers set prices?

What impact has the Internet had on consumer purchase decisions?Has it made customers more price conscious?

Explanation / Answer

Increasing price sensitivity makes the demand curve less steep.These consumers are more price elastic. At the very extreme,perfectly elastic demand is a horizontal line. When there is a change in demand, only the intersection between thesupply and demand curves matter when we're trying to determineequilibrium quantity. With the same shift in demand, theequilibrium quantity is the same regardless of how steep or flatthe demand curve is. Consumers have changed the way retailers set prices by forcing themto take into account how much quantities will decrease given anincrease in prices so that they maximize profit. In the case ofgoods for which demand is elastic, retailers are careful not toincrease prices lest they lose customers. For inelastic goods,however, retailers are able to charge a price premium and not fretover the decrease in quantity. The internet has made consumer purchase decisions more pricesensitive. Factors such as locational convenience have becomeirrelevant in many markets, and consumers are left with the hardnumbers with which to compare a large array of products.

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