**Aplia Homework: Elasticity of Demand and Supply****4. Determinants of the Price Elasticity of Demand**Consider some determinants of the price elasticity of demand:- The availability of close substitutes- The proportion of a consumer's budget spent on the good- The time horizon being consideredA good with many close substitutes is likely to have relatively _________ demand, because consumers can easily choose to purchase one of the close substitutes if the price of the good rises.A good’s price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand?- ○ Sports car- ○ Chemotherapy for cancer patientsPrice elasticity for a good depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has the most elastic demand?- ○ Thumbtacks- ○ Monthly cell phone bill- ○ Fish food The price elasticity of demand for a good also depends on how you define the good.**Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between.**| Categories | Most Elastic | In Between | Least Elastic ||-------------------|--------------|------------|---------------|| Red bell peppers | ○ | ○ | ○ || Food | ○ | ○ | ○ || Vegetables | ○ | ○ | ○ |The price elasticity of demand is also affected by the given time horizon. Other things being equal, the demand for natural gas will tend to be ___ elastic in the short run than in the long run.---**Instructions:**- Select the appropriate option in the table for each category to represent their demand elasticity.- Complete the sentence regarding the elasticity of natural gas.**Options for Natural Gas Elasticity:**- More- Less**Buttons:**- Grade It Now- Save & Continue (Continue without saving)

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A good with many close substitutes is likely to have relatively demand, because consumers can easily choose to purchase one of the close substitutes if the price of the good rises. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? O Sports car O Chemotherapy for cancer patients

A good with many close substitutes is likely to have relatively demand, because consumers can easily choose to purchase one of the close substitutes if the price of the good rises. A good's price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand? O Sports car O Chemotherapy for cancer patients

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

**Aplia Homework: Elasticity of Demand and Supply**

**4. Determinants of the Price Elasticity of Demand**

Consider some determinants of the price elasticity of demand:

- The availability of close substitutes
- The proportion of a consumer's budget spent on the good
- The time horizon being considered

A good with many close substitutes is likely to have relatively _________ demand, because consumers can easily choose to purchase one of the close substitutes if the price of the good rises.

A good’s price elasticity of demand depends in part on how necessary it is relative to other goods. If the following goods are priced approximately the same, which one has the least elastic demand?

- ○ Sports car
- ○ Chemotherapy for cancer patients

Price elasticity for a good depends on the share of a consumer's budget spent on a good. Other things being equal, which of the following goods has the most elastic demand?

- ○ Thumbtacks
- ○ Monthly cell phone bill
- ○ Fish food

The price elasticity of demand for a good also depends on how you define the good.

**Organize the goods found in the following table by indicating which is likely to have the most elastic demand, which is likely to have the least elastic demand, and which will have demand that falls in between.**

| Categories | Most Elastic | In Between | Least Elastic |
|-------------------|--------------|------------|---------------|
| Red bell peppers | ○ | ○ | ○ |
| Food | ○ | ○ | ○ |
| Vegetables | ○ | ○ | ○ |

The price elasticity of demand is also affected by the given time horizon.

Other things being equal, the demand for natural gas will tend to be ___ elastic in the short run than in the long run.

---

**Instructions:**
- Select the appropriate option in the table for each category to represent their demand elasticity.
- Complete the sentence regarding the elasticity of natural gas.

**Options for Natural Gas Elasticity:**
- More
- Less

**Buttons:**
- Grade It Now
- Save & Continue (Continue without saving)

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