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ELASTICITY OF MARKETS

ELASTICITY OF MARKETS. ELASTIC MARKET. Elastic Market means that the demand for a product is very sensitive to price changes Examples: Would you still buy your favorite candy bar if it was $2 more than the other candy bars?. Inelastic Market.

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ELASTICITY OF MARKETS

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  1. ELASTICITY OF MARKETS

  2. ELASTIC MARKET • Elastic Market means that the demand for a product is very sensitive to price changes • Examples: Would you still buy your favorite candy bar if it was $2 more than the other candy bars?

  3. Inelastic Market • In an inelastic market the demand is not very sensitive to changes in price. • Example: gasoline prices

  4. Three Factors of Elasticity To determine elasticity of a product (market), ask your self these three questions. • Are substitutes or alternatives available? • Is this a luxury or a need item? • What is the cost of the item?

  5. Elastic vs. Inelastic • Milk? • Coke? • Big Macs? • Gasoline? • Xbox? • Electricity? • IPods? • Eggs?

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