Need help answering one of these questions for class discussion this week.
All prices set in a market are the result of the interaction of supply and demand. This week we look at the extent to which changes in price are effected by the degree of elasticity of the demand curve and the degree of the elasticity of the supply curve. There are three items in the market place about which we all have a strong interest about what is happening to the price. Chose one of the following to discuss:
1. Find an online article explaining, why are gasoline prices so low? Is demand for gasoline elastic, unitary elastic or inelastic?
2. Find online information about the price of homes in your community. Are they going up, staying the same or going down and why? Is the demand for housing elastic, unitary elastic, or inelastic?
3. Auto mobile sales have been very slow with many companies offering rebates, discounts and low financing? Find online information about why companies are lowering prices? Is the demand for automobiles elastic, unitary elastic or inelastic?