UrGENT, PLS ANSWER MY QUESTION IMMEDIATELY!!!
For each pair of commodities,state which do you think is more elastic and give your reasons:perfume and salt; penicillin and icecream; automobiles and automobile tires.
I understand you need an urgent response. Let's analyze each pair of commodities and determine which one is more elastic.
1. Perfume and Salt:
To determine the elasticity, we can consider factors like availability of substitutes, necessity, and price changes. Perfume is a luxury item with many substitutes available, such as body sprays, lotions, or other fragrances. On the other hand, salt is a necessary household item with limited substitutes. In terms of price changes, perfume is generally more sensitive to price changes as people can easily switch to alternative fragrances. Therefore, perfume is likely to be more elastic than salt.
2. Penicillin and Ice Cream:
Similar to the previous pair, we can evaluate the elasticity based on substitutes, necessity, and price changes. Penicillin is a crucial antibiotic used for medical purposes, and there are limited substitutes available. Its demand is relatively inelastic as people require it for treating infections or illnesses. On the other hand, ice cream is a non-essential food item with numerous substitutes like frozen yogurt or sorbet. Additionally, people can easily reduce or substitute their consumption of ice cream due to price changes. Therefore, ice cream is likely to be more elastic than penicillin.
3. Automobiles and Automobile Tires:
Considering substitutes, necessity, and price changes, automobiles and automobile tires have different characteristics. Automobiles are a necessity for many people, and although there are alternatives like public transportation or biking, they do not directly substitute owning a car. As a result, the demand for automobiles is generally more inelastic. On the other hand, automobile tires have more substitutes available, such as different brands or types of tires. Additionally, people can delay tire replacements or opt for used tires due to price changes. Therefore, automobile tires are likely to be more elastic than automobiles.
To summarize:
- Perfume is more elastic than salt.
- Ice cream is more elastic than penicillin.
- Automobile tires are more elastic than automobiles.
It's important to note that these conclusions are based on general assumptions and observations and may vary in specific situations or markets. Additionally, economists often use price elasticity calculations to determine the exact elasticity of different goods.