Chapter 7, Problem 23AA

To determine

To evaluate: The price elasticity of demand for DVDs compared to that of insulin needed by diabetics.

Explanation of Solution

Insulin demand to treat diabetes is commonly known as inelastic. If the insulin price increases, it is likely to be paid by a diabetic. Since there are no viable alternatives; Yet insulin itself isn't a perfectly inelastic product.

How many individuals own DVD players depends upon the demand for DVD movies. The market for DVD movies will rise as the rate of DVD players drops and more individuals buy DVD players, and the demand for DVD movies will shift to the right. So, the market for a DVD player is elastic.

Economics Concept Introduction

Introduction:   The degree to which the successful appetite for something increases as its price changes is the price elasticity of demand, or elasticity. People usually want things less as certain things are more costly.