Law of demand tells us that consumers will respond to a price drop by buying more, but it does not tell us how much more. The degree of sensitivity of consumers to a change in price is measured by the concept of price elasticity of demand.
What are the major determinants of price elasticity of demand? Use these determinants in judging whether demand for each of the following products is elastic or inelastic. Explain your rational.
a. Apples
b. Cigarettes
c. Winston cigarettes
d. Butter
e. Gasoline