Consider some determinants of the price elasticity of demand: • The availability of close substitutes • Whether the good is a necessity or a luxury • How broadly you define the market • The time horizon being considered A good without any close substitutes is likely to have relatively demand, since consumers cannot easily switch to a substitute good if the price of the good rises. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the most elastic demand? Diamond necklace O Amputation procedures for diabetes sufferers The price elasticity of demand for a good also depends on how you define the good. Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between. Categories Most Elastic In Between Least Elastic Vegetables Food Red bell peppers The price elasticity of demand is also affected by the given time horizon. If the price of gasoline is relatively high for a long time, consumers are more likely to buy more fuel-efficient cars or switch to alternatives like public elastic in the short run than in the long run. transportation. Therefore, the demand for gasoline is

1. Determinants of the price elasticity of demand Consider the following list containing several price elasticity of demand determinants: • The availability of close substitutes • Whether a good is a luxury or necessity • How broadly the market is defined • The time horizon under consideration A good with no close substitutes is predicted to have relatively price of the good were to increase. The price elasticity of demand of a good depends in part on its relative necessity in comparison to other goods. Assume the following goods all have approximately the same price. Which of the goods has the most elastic demand? A liver for people on the transplant waiting list O Self-driving cars The price elasticity of demand for a good also depends on how the good is defined. Using the following table, organize the goods by indicating which you predict to have the most elastic demand, the least elastic demand, and the elasticity of demand that falls somewhere in between. Categories Most Elastic…

1. Determinants of the price elasticity of demand Consider the following list containing several price elasticity of demand determinants: The availability of close substitutes Whether a good is a luxury or necessity How broadly the market is defined The time horizon under consideration A good in the presence of many close substitutes is predicted to have relatively, purchase one of the close substitutes if the price of the good were to increase. demand, since consumers can easily choose to elastic The price elasticity of demand of a good depends in part on its relative necessity inelastic ison to other goods. Assume the following goods all have approxiunately the same price. Which of the aande kan th

4. Determinants of the price elasticity of demand Consider some determinants of the price elasticity of demand: • Availability of close substitutes • Whether the good is a necessity or a luxury • Whether the good is broadly defined • The proportion of a consumer's budget spent on the good • Time people have to adapt to new price changes A good without any close substitutes is likely to have relatively demand, because consumers cannot easily switch to a substitute good if the price of the good rises. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the most elastic demand? Sports car Chemotherapy for cancer patients Price elasticity for a good depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has the most elastic demand? Thumbtacks Fish food O Monthly cell phone bill