I have had experience with the differences between elasticity and inelasticity in products that I regularly see and purchase. I know how certain marketable products such as food and appliances are priced such that they, in some sense, gauge current consumer demand for them. For example, a new book oftentimes is initially valued at a significant price, perhaps somewhere around thirty dollars depending on the projected popularity of the book; however, the price of the book will often lower or maybe even increase, though this is a rare circumstance, as time passes and preliminary customers, having purchased the book, offer their reviews, whether they are deprecating or acclaiming, and the price of the book will often then correspond to either this rise or decrease in popularity and approval. Though I know that many people around me, including members of my family, may feel that they cannot live without, for example, chocolate or the newest music or video game regardless of the fluctuating prices of such items, I do not, normally, feel this way. My relatives say that I have inherited my Dad’s meticulous skepticism and rationality, and, as a result, I question each purchase, each decision, that I make before it is done. I want to be certain that I am making the correct decision. The price of the item that I happen to be considering at a given moment is only a partial factor in my ultimate conclusion, for I also take into account the importance of the purchase, what the intended outcomes will be of that purchase, whether I truly need the item, and other things of this sort. Though I am most certainly not an economist in relation to the education necessary to be so certified, I do make the attempt to perceive the world with, as a minimum...
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...s over time, I will buy it. Though I realize that books are not absolutely essential to a person’s survival, they are things that are central to my life; nonetheless, I am not as immune to material considerations as to be unable to understand the importance of money in relation to whether I may call a book mine. Having a book advertised so exorbitantly does detract from my willingness to buy it, so I would classify most books, excluding textbooks which are often necessary, as being elastic purchases for me. There are alternatives to purchasing books in that I may read information on accessible websites, rent books from the library, or engage my time in some sort of technological amusement, so, unfortunate as it is, books are elastic purchases because there is a certain range of pricing that I and the books that I buy need to adhere to in order to receive my demand.
Inelastic demand means that an increase or decrease in price will not significantly affect demand for the product. In spite of the rising prices for the Blue Jays tickets, fans were expected to turn out in large numbers. This inelastic demand for the tickets can be attributed in large part of the fact that their teams plays so well in 1998, and another factor is that the Blue Jays fan could never stay away from their team. Another inelastic demand for the Blue Jays tickets is that there is no other locally substitute team.
This article, “Why Are Textbooks So Expensive?” by Henry Roediger reveals the truth of why textbooks are so pricey. He shows how textbooks prices are costly not because of inflation, corporate textbook companies, and frequent revisions, but because of the sale of used textbooks. The article is elaborating on why used textbooks are the real culprit as well. One main point that is highlighted is that used textbooks are resold for many years. The initial selling of the textbook is the only time the author will make a profit, but the bookstore will make a profit every time they resell a used book. It is essential for the author to raise the price to compensate for the loss of money when dealing with used textbooks.
We the consumer would rather pay less for any product that is needed or want. Ultimately we are the reason for high prices as well as low prices. Prices of products do not always stay the same and more popular products have higher prices than less popular products. These fluctuations, high prices and low prices are from the idea of supply and demand. Supply and demand defines the effect that the availability of a particular product and the desire or demand for that product has on price. Generally, if there is a low supply and a high demand, the price will be high (Investopedia). To understand the idea of supply and demand, the understanding of supply and the understanding of demand must be defined. The Law of Supply states that at higher prices, producers are willing to offer more products for sale than at lower prices, also that the supply increases as prices increase and decreases as prices decrease (Curriculum Link). The Law of Demand states people will buy more of a product at a lower price than at a higher price, if nothing changes, at a lower price, more people can afford to buy more goods and more of an item more frequently, than they can at a higher price and that at lower prices, people tend to buy some goods as a substitute for others more expensive (Curriculum Link). In todays economics these ideas are seen frequently in everyday life. The laws of supply and demand are seen in many ways in the company Apple Inc. Each year Apple Inc unveils a long awaited mobile operating system and IPhone. We can also see many aspects of the law of supply and demand in Nike Inc’s Jordan Brand. Jordan Brand has released a number of...
There are two types of people in this world, the first ones are, the people who doesn't really like reading books because most of them doesn't have pictures on it, and they find it extremely boring. Then the other type of people, who simply gets lost into their book every time they read, because they just simply love reading. Some of them even say that when they're reading, it is taking them to a different world that only their imagination can create. That is why some people consider their books as their most priced possessions, because of how much it means to them and also some books can be rather pricey. Indeed, books can really be expensive, however, you might be too astonished when you see the following books, because they're considered
In order to best understand why implementing such a loan program would be most beneficial to the students one must understand why textbook prices have spiraled out of control. The problem lies with textbook pub...
The law of demand tells us that "Quantity demanded rises as price falls, other things constant, or alternatively, quantity demanded falls as price rises, other things constant (McGraw 2004). The XBOX 360 phenomenon that took place in 2005 is a good example of this economic principle at work. Microsoft's XBOX 360 gaming console was released into the U.S. market on November 22nd 2005. The release came after a great deal of advertising and media hype that ensured that the demand for the product would outweigh the supply. Quite simply, there were more consumers wanting to purchase the product than there was product available. The retail price for the gaming system with a hard drive was $399. Many consumers, however, paid a great deal more than the $399 sticker price to acquire the system. On the morning of the U.S. release, retailers across the nation sold out of the product within just a few hours of opening their doors to consumers. In the weeks that followed however, many consumers purchased the unit from sellers on on-line auction sites and even from individuals in parking lots for as much as $1500. The reason for this was that the supply was significantly less than the demand for the product. In some cases, parents who wanted to ensure that their children received and XBOX 360 for Christmas in 2005 were willing to pay well over retail for the hard-to-acquire system. In other cases, video gaming enthusiasts wanted to be among the first individuals to own and play the system. News reports across the nation showed footage of people lining up days ahead of November 22nd in order to secure a place in line at retailers that would have the product available on the release date.
5) Time: The elasticity of demand varies with the length of time. In general, demand is more elastic for longer period of time. For instance, if the price of kerosene rises, it may be difficult to substitute it with cooking gas within a very short time. But if sufficient time is given, people will make adjustments and use firewood or cooking gas instead of kerosene.
Elasticity is the responsiveness of demand or supply to the changes in prices or income. There are various formulas and guidelines to follow when trying to calculate these responses. For instance, when the percentage of change of the quantity demanded is greater then the percentage change in price, the demand is known to be price elastic. On the other hand, if the percentage change in demand is less than then the percentage change in price; Like that of demand, supply works in a similar way. When the percentage change of quantity supplied is greater than the percentage change in price, supply is know to be elastic. When the percentage change of quantity supplied is less then the percentage change in price, then the supply then demand is known to be price inelastic.
For commodity goods, consumers are more inelastic to price changes. As commodities are at affordable price, the price differences are rather small. Therefore, lowest price is not a main concern for most consumers.
Walmart’s sports car toys price elasticity is 2.25. This shows that it is elastic as a change in price causes a change in quantity demanded that is greater than one percent. As the price decreases, total revenue is expected to increase. This is so because the demand curve slopes downward which means a decrease in price leads to increase quantity purchased and increased receipts. Since the change in quantity was greater than the change in price, the quantity has a stronger effect and will be able to offset the price effect.
According to Microeconomics, Price Elasticity of Demand is the responsiveness of the quantity demanded to a change in price, measured by dividing the percentage change in the quantity demanded of a product by the percentage change in the product’s price (Hubbard & O’Brien, 2015). Demand is considered elastic when the quantity demanded for a product increases or decreases in response to price change. Normally, sales increase with price drops and decrease when prices rise. Coca Cola products are considered to have an elastic demand because quantity demanded for its products often change when prices change. If the price of Coke goes from $1.50 a bottle to $2.00 and the price of a 20 oz. Pepsi remains at or around $1.50
In conclusion, America provides many ways to help reduce the cost of college textbooks but society is still not satisfied with the outcome. The Open Textbook, Affordable Textbook Act, and book store rentals are wonderful programs, but has its disadvantages that hopefully would be resolved in the 2016 presidential elections. The statistics show that many students across the nation benefit from learning with quality of teaching, the amount of accessibility it provides without having to worry about paying off student loans. School administrations should consider about transferring to an act that would benefit both the school and the students, but also provide more equality to the publishers and students.
During the past few years, the publishing and reading world has been facing a veritable digital book onslaught. E-books have been outselling print books on Amazon since 2011 (Polanka, 7). While digital book sales skyrocketed, print book sales, especially those of mass marked paperbacks, diminished. Even the fact that e-books are not much cheaper than print books does not seem to interfere with the former’s popularity. It would seem that the age of print books is about to end, and quite soon.
Mathematically, Hooke’s law states that F equals the displacement or extension length multiplies a constant k, or F = k∆l. F is the force in the spring which migh...
One method that Toyota can consider is using the price elasticity of demand to determine whether to increase or decrease the sale price of their automobiles. The responsiveness or sensitivity of consumers to a price change is measured by a product's price elasticity of demand (McConnell & Brue, 2004). Market goods can be described as elastic or inelastic goods as change in quantity demanded for that good. If demand is elastic, a decrease in price will increase total revenue. Even though a lower price would generate lower sales revenue per unit, more than enough additional units would be sold to offset lower price (McConnell & Brue, 2004). In a normal market condition, a price increase leads to a decreased demand, and a price decrease leads to increased demand. However, a change in income affecting demand is more complex.