Discussion:
DQ 1. Different products have different price and income elasticities. Heart medication, for example, is price inelastic and corn is price elastic.
Find a product that has not already been selected and describe the price elasticity and income elasticity. How much control might an organization have over pricing based on a product's elasticity?
Discuss which of the elasticity rules you used to determine your answer.
DQ 2. The Bureau of Labor Statistics and Federal Reserve Bank in St. Louis both have a lot of economic information. Based on current economic information for an industry you are familiar with, discuss the effects of either a sudden increase or decrease in the number of competitors on prices in the long run. Be sure to address the scenario from the vantage points of both buyers and suppliers.
What would you recommend as a course of action, if any?
For the industry you have chosen, discuss how price is likely to move from the present into the future.
DQ 3. Discuss the implications of varying price and income elasticities for the bundling or unbundling of consumer services under a single heading such as "health care."
DQ 4. Using the concept of income elasticity, discuss the impact an economic downturn on the market for a particular product.