5. For each of the following pairs, which of the two goods is more likely to...
5. For each of the following pairs, which of the two goods is more likely to be elastically demanded and why?
a. Demand for tangerines vs. demand for fruit
b. Demand for beef next month vs. demand for beef over the next decade
c. Demand for Exxon gasoline at the corner of 7th and Grand vs. demand for gasoline in the entire city
d. Demand for insulin vs. demand for vitamins
Homework Answers
A) Demand for tangerines will be more elastic. Demand for fruits will be less elastic because there are many fruits available.
B) Demand for beef next month will be more elastic. Demand in the short run will be more elastic than in the long run
C) The demand for Exxon gasoline at the corner of 7th and Grand is more elastic as consumers are less reactive to changes in the price of gasoline in the entire city.
D) demand for vitamin is more elastic because consumers are more reactive to changes in the price of vitamins.
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