• Determine whether each of the following items is elastic or inelastic: bottled water, gourmet coffee, Apple cell phones, and gasoline. Explain your reasoning.
Answers
Answer:
please mark as BRAINLIEST answer
Answer:
Let us understand what is elastic and inelastic pricing:
Price Elasticity:
Price elasticity of demand focuses on the change in the demanded quantity of a product as the price changes.
Price Inelasticity:
A product is defined to be an inelastic one when a change in its price does not significantly change the demand for that product. Thus, when demand for a product or service remains at similar levels despite the price changes, it is said to be inelastic.
The objective of elastic and inelastic demand is to understand how supply or demand changes considering changes in price. It helps to understand the workings of the economy.
Bottled Water: If the price changes, the demand for the product may not change since there are a lot of other options to get free water. Thus, it is inelastic.
Gourmet Coffee: If the price changes, the demand for the product may not change since the users are used to a certain quality of coffee which isn't normally available. Thus, it is inelastic.
Apple Cell phones: If the price changes, the demand for the product may change due to a lot of substitutes available in the market however since Apple I-phones are unique with ios and its uniqueness...thus, the demand is inelastic.
Gasoline: If the price of gasoline increases, people will still continue to drive cars despite having other public transport which might be cheaper. The idea here is more about the convenience and habit that a person develops over a period of time. Hence, the demand will be inelastic.
Explanation: