Economics

3. Determine if the demand for the following products is price elastic or price inelastic, and explain your answer. In your explanation, be sure to include how the necessity of a good and the availability of substitutes affect the price elasticity of demand in each of these specific cases:

• Gasoline as a commodity

• Gasoline sold at a local gasoline station

• Hotel rooms for people planning a vacation

• Hotel rooms for people on business to meet an important client

  1. 👍 0
  2. 👎 0
  3. 👁 297
  1. - Elastic (don't have to buy, investor can easily find substitute)

    - Inelastic (no substitutes, you've just left home driving to work and your gas gauge is on E. you must buy it, your only choice is to not fill your tank completely).

    - Elastic (very)

    - Inelastic (e.g. absolutely need a 3-star or better hotel room in xxx city on xxx date)

    In general,

    "if you would purchase these products regardless of price...inelastic if yes, yes, elastic if no."

    1. 👍 0
    2. 👎 0

Respond to this Question

First Name

Your Response

Similar Questions

  1. marketing

    You have been hired as a marketing consultant to Johannesburg Burger Supply, Inc., and you wish to come up with a unit price for its hamburgers in order to maximize its weekly revenue. To make life as simple as possible, you

  2. Economics

    Suppose the price elasticity of demand for a novel translated into English is perfectly inelastic. Assume the initial price of the novel is $24 and the quantity demanded is 222 copies per year. If the price of the novel increases

  3. Economics

    Suppose a university decides to alter its tuition schedule by separating its students based on how many years of college they have completed. Most university programs require four years to complete. First-year students would get a

  4. Calculus

    The consumer demand equation for tissues is given by q = (97 − p)2, where p is the price per case of tissues and q is the demand in weekly sales. (a) Determine the price elasticity of demand E when the price is set at $26.

  1. economics

    Identify three goods each for which your demand is (a) elastic or (b) inelastic. What accounts for the differences in elasticity? Thank you for using the Jiskha Homework Help Forum. Let me help by explaining the difference between

  2. Microeconomics (full version)

    Pharmaceutical drugs have an inelastic demand, and computers have an elastic demand. Suppose that technological advance doubles the supply of both products (that is, the quantity supplied at each price is twice what it was). a.

  3. Economics

    I think I get this but could use some guidance to make sure, I am having problems with 2e). 1)In an article about the financial problems of USA Today, Newsweek, reported that the paper was losing about $20 million a year. A Wall

  4. Economics: Price Elasticity

    Please check my answers whether they are correct or not. If not, please help me why they are wrong. Thank you. Question 1: Point: A (300, 1000) Point B: (200, 1200) According to the midpoint method, the price elasticity of demand

  1. Economics

    Beachfront resorts have inelastic supply, and automobiles have an elastic supply. Suppose that a rise in population doubles the demand for both products (that is, the quantity demanded at each price is twice what it was). a. What

  2. Microeconomics (need to see if i got these right.

    31. If an increase in the price of a good leads to an increase in total revenue, then _____. (Points: 3) the supply curve must be price inelastic the demand curve must be price inelastic I CHOSE THIS ONE the supply curve is price

  3. Economics 201

    Determine the price elasticity of demand for a microwave that experienced a 20% drop in price and a 50% increase in weekly demand quantity. I know I have to use the price elasticity of demand formula, but I keep getting the wrong

  4. Math - Limits/Derivatives

    If a price-demand equation is solved for p, then price is expressed as p = g(x) and x becomes the independent variable. In this case, it can be shown that the elasticity of demand is given by E(x) = - [g(x) / xg'(x)]. Use the

You can view more similar questions or ask a new question.