Chapter 7, Problem 21AA

To determine

To evaluate the list of the products prices in the American economy almost never change, whereas others change all the times and the reason for price changes slowly or quickly for various products.

Explanation of Solution

Typically speaking, goods with an elastic demand or luxury items with several alternatives on the market.eg DVDs, fast food items, luxury vehicles, high-end technological devices, luxurious holidays, certain pricey food items such as steak and lobster are the products that are likely to change frequently. Where commodities with inelastic demand are luxury items or have few alternatives, such as durable foods such as milk, spices such as salt and pepper, and other medicinal products are generally don’t change frequently.

Economics Concept Introduction

Introduction: Elastic demand is referring to a variation in market demand as the rate of a product or service increases, whereas demand for inelastic goods refers to the ineffective of demand changes as prices increase.