First, give an example of a product or service that you purchased in the last year for which your demand is relatively inelastic. You should explain what factors influenced why your demand for the selected product or service was inelastic. Be as specific as possible in your explanation. You may wish to review the factors influencing the elasticity of demand for a product to assist you in your explanations.
Second, give an example of a product or service that you purchased in the last year for which your demand is relatively elastic. You should explain what factors influenced why your demand for the selected product or service was elastic. Be as specific as possible in your explanation. You may wish to review the factors influencing the elasticity of demand for a product to assist you in your explanations.
Describe why such information concerning the price elasticity of demand would be of interest to the firms selling these products and services. Do you think it is fair for firms to use information concerning the elasticity of demand for their products in their pricing decisions? How might they use this information in their pricing decisions?