The Price Elasticity of Demand [WLOs: 1, 2] [CLOs: 1, 2, 3]

The price elasticity of demand is people’s responsiveness of quantity demanded (or consumption) when there is a change in price.

Respond to the following:

  • Identify the determinants of the price elasticity of demand. Explain each one.
  • Determine whether each of the following items is elastic or inelastic: bottled water, gourmet coffee, Apple cell phones, and gasoline. Explain your reasoning.
  • Distinguish between a necessity and a luxury.
  • How are the price elasticity of demand and total revenue related? Why is the price elasticity of demand important to pricing?

Your initial post should be a minimum of 300 words.

You can leave a response, or trackback from your own site.

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