Inelastic demand
INEALSTIC DEMAND
Student Name
Institution
Inelastic Demand Inelastic demand is a situation whereby a one per cent change in price of a commodity leads to less than one per cent change in quantity demanded by the consumers. Products that exhibit inelastic demand have an almost constant demand no matter the change in prices. Figure 1: Diagram illustrating inelastic demand As shown from diagram above, the price changes from P1 to P2 and quantity fall from Q1 to Q2. The decrease in quantity demanded is not proportional to decrease in quantity demanded.In perfectly inelastic demand, change in prices leads to zero changes in quantity demanded.
Inelastic demand of Plastic surgery: discussion questions
When the price of plastic surgery increases, the number of operations decreases This statement is true. Increase in prices of plastic surgery will lead to decrease in demand for the number of plastic surgeries done. This is because demand is not perfectly inelastic. As shown by diagram, if the demand for plastic surgery was perfectly inelastic, it would be unaffected by change in prices. Since it’s inelastic, the quantity of plastic surgeries done will decrease but not in a proportional amount to rise in prices.
The percentage change in the price of plastic surgery is less than the percentage change in quantity demanded This statementis false. The percentage change in prices is always higher than per cent change in demand for inelastic demand as shown by the slanting of the curve in Figure 1. Higher per cent change in demand as compared to prices depicts elastic demand which the above statement reflects.
Changes in the price of plastic surgery do not affect the number of operations This statement is false. If the number of plastic surgeries were to remain unaffected no matter the price changes, demand would have to be perfectly inelastic. According to Troesken& National Bureau of Economic Research (2010), an increase in
Student Name
Institution
Inelastic Demand Inelastic demand is a situation whereby a one per cent change in price of a commodity leads to less than one per cent change in quantity demanded by the consumers. Products that exhibit inelastic demand have an almost constant demand no matter the change in prices. Figure 1: Diagram illustrating inelastic demand As shown from diagram above, the price changes from P1 to P2 and quantity fall from Q1 to Q2. The decrease in quantity demanded is not proportional to decrease in quantity demanded.In perfectly inelastic demand, change in prices leads to zero changes in quantity demanded.
Inelastic demand of Plastic surgery: discussion questions
When the price of plastic surgery increases, the number of operations decreases This statement is true. Increase in prices of plastic surgery will lead to decrease in demand for the number of plastic surgeries done. This is because demand is not perfectly inelastic. As shown by diagram, if the demand for plastic surgery was perfectly inelastic, it would be unaffected by change in prices. Since it’s inelastic, the quantity of plastic surgeries done will decrease but not in a proportional amount to rise in prices.
The percentage change in the price of plastic surgery is less than the percentage change in quantity demanded This statementis false. The percentage change in prices is always higher than per cent change in demand for inelastic demand as shown by the slanting of the curve in Figure 1. Higher per cent change in demand as compared to prices depicts elastic demand which the above statement reflects.
Changes in the price of plastic surgery do not affect the number of operations This statement is false. If the number of plastic surgeries were to remain unaffected no matter the price changes, demand would have to be perfectly inelastic. According to Troesken& National Bureau of Economic Research (2010), an increase in
References: Riggs, T., & Bonk, M. (2008). Everyday finance: Economics, personal money management, and entrepreneurship. Detroit: Gale Cengage Learning. Troesken, W., & National Bureau of Economic Research. (2010). The elasticity of demand with respect to product failures ; or why the market for quack medicines flourished for more than 150 years. Cambridge, Mass: National Bureau of Economic Research.