Problem: There are 4 factors that influence the price elasticity of demand:
- The availability of substitutes
- The specific nature of the good
- The part of income spent on the good
- The time consumers have to buy the good
1. Choose a product you have purchased in the past month from a clothing or shoe store.
2. Describe how each of the 4 factors contributed to the elasticity of the good.
3. Is the product considered elastic, inelastic, or unitary elastic?
4. What effect does the current supply and current demand have on this product?