There are two brothers, Joe and Marc who both like candy. When Joe shops he always spends $10 on candy When Marc shops he always buys 10 pieces of candy. What is Joe's elasticity of demand for candy? Why? What is Marc's elasticity of demand for candy? Why?
To calculate elasticity of demand, we need to know the percentage change in quantity demanded and the percentage change in price. However, in this scenario, we don't have any information about price changes, so we cannot calculate the exact elasticity values. But we can still provide a general explanation of elasticity for Joe and Marc.
Elasticity of demand measures how responsive the quantity demanded of a good is to changes in price. It helps us understand how sensitive individuals are to price changes and their purchasing behavior.
For Joe:
Since we don't have any information about Joe's response to changes in candy prices, we cannot determine Joe's exact elasticity of demand. However, we can make an assumption based on the given information. Joe spends a fixed $10 on candy, regardless of the price. This implies that his quantity demanded remains constant regardless of price changes, resulting in a perfectly inelastic demand. In this case, the elasticity of demand for Joe's candy would be zero.
For Marc:
Similarly to Joe, since we don't have any information about Marc's response to changes in candy prices, we cannot determine his exact elasticity of demand. However, we can make an assumption based on the given information. Marc always buys 10 pieces of candy, regardless of the price. Although the quantity remains constant, it is important to note that Marc's demand is not perfectly inelastic like Joe's. The demand is still affected by price changes, but the extent of this effect cannot be determined without additional information. So, to give a more specific answer, we need to know how Marc's quantity demanded changes with different price levels.
In summary, without information about the quantity changes in response to price changes, we cannot calculate the exact elasticity for either Joe or Marc.