which products are most likely to be the most price elastic course hero

Why are elastic goods more expensive than inelastic goods?

Question 4 1 / 1 pts Which product is most likely to be the most price elastic? milk housing clothing Correct! automobiles Great! Using the determinants of elasticity listed on page 81, the characteristics of an elastic good would be that the good has many substitutes, it comprises a large portion of an individual’s income and it is a luxury good.

When would you want to own a business that sells price-elastic products?

Question 22 Which product is most likely to be the most price elastic milk. Question 22 which product is most likely to be the. School Park University; Course Title EC 142; Type. Test Prep. Uploaded By rmh94. Pages 18 Ratings 100% (23) 23 out …

Is the demand for chocolate elastic or inelastic?

The demand for Nike basketball shoes is more price elastic than the demand for basketball shoes as a whole. This is best explained by the fact that. (a) Nike basketball shoes are a luxury good, not a necessity. (b) Nike basketball shoes are the best made and widely advertised.

When are price elastic products beneficial?

For which of the following products is demand likely | Chegg.com. Business. Economics. Economics questions and answers. For which of the following products is demand likely to be the most elastic? a) All shoes b) All gym shoes c) Converse All Star sneakers d) All clothing items. Question: For which of the following products is demand likely to ...

Which products are most likely to be the most price elastic?

Explanation: China and glassware are most likely to be the most price elastic.

What products are price elastic?

Common elastic items include:Soft Drinks. Soft drinks aren't a necessity, so a big increase in price would cause people to stop buying them or look for other brands. ... Cereal. Like soft drinks, cereal isn't a necessity and there are plenty of different choices. ... Clothing. ... Electronics. ... Cars.

Which product is likely to be price inelastic?

Any good produced by a monopoly is likely to be inelastic demand. For example, if Sky increases the cost of premiership pay per view, many football fans will pay the extra price. Though because it isn't a necessity, demand may be less inelastic than say petrol. Tap water.May 4, 2019

What are some products with elastic demand?

An example of products with an elastic demand is consumer durables. These are items that are purchased infrequently, like a washing machine or an automobile, and can be postponed if price rises. For example, automobile rebates have been very successful in increasing automobile sales by reducing price.

Which of the following is most likely to have the most price inelastic demand?

The correct answer is B) Toothpaste.

What makes a product elastic?

A product is considered to be elastic if the quantity demand of the product changes more than proportionally when its price increases or decreases. Conversely, a product is considered to be inelastic if the quantity demand of the product changes very little when its price fluctuates.

Which of the following has more elastic demand?

A commodity with more substitutes has more elastic demand, since the prices of substitutes will affect the elasticity of demand and the substitution effect will be strong.

What is the price elasticity of demand likely to be for basic food products?

Price elasticities for foods and nonalcoholic beverages ranged from 0.27 to 0.81 (absolute values), with food away from home, soft drinks, juice, and meats being most responsive to price changes (0.7–0.8). As an example, a 10% increase in soft drink prices should reduce consumption by 8% to 10%.

What factors make a good more elastic?

Key TakeawaysMany factors determine the demand elasticity for a product, including price levels, the type of product or service, income levels, and the availability of any potential substitutes.High-priced products often are highly elastic because, if prices fall, consumers are likely to buy at a lower price.More items...

Which product is more elastic?

The most common goods with inelastic demand are utilities, prescription drugs, and tobacco products. In general, necessities and medical treatments tend to be inelastic, while luxury goods tend to be the most elastic. Another typical example is salt.

How do you make a product more elastic?

The following factors can have an effect on elasticity:Substitutes: If it's easy to choose a different product when prices change, the demand will be more elastic. ... Absolute price: When a product is very expensive, even a small percentage change in price will make it prohibitively expensive to more buyers.More items...

What is price elasticity of demand with examples?

What is an example of elastic demand? Elastic demand is used to describe the scenario where the change in demand is sensitive to a small change in price. For example, if the price of a Lays chips increases, consumers are more likely to shift to a different brand, driving the demand down and vice versa.Jan 21, 2022

What does price elastic mean?

If a firm wishes to increase market share and increase its sales then price elastic means that cuts in price will beneficial in increasing sales. However, it depends on how other firms react.

Why is cutting prices important?

Cutting prices will enable lower average costs because output can increase, this could even increase profitability. 3. Elasticity is not the Most Important Factor in Determining Profitability. Having inelastic demand goods (e.g. trains) doesn’t make a firm profitable.