Elasticity of Demand
The demand for goods varies based on the change in the price of the goods. For example, if oatmeal costs less than cereal, consumers would buy more oatmeal for breakfast. However, the demand for inexpensive goods and services is not significantly affected by price fluctuations. Similarly, the demand for essential goods that have no substitute on the market rarely changes with a change in price.
Write a 500 – to 600 – word paper that addresses the following:
Be sure to use several resources and examples to support your thinking for each one.
• Identify a product that is regularly consumed, such as soft drinks or a particular snack food.
• Describe how the demand (consumption) will be impacted by a 25% price increase.
• Conversely, how will the demand (consumption) change if the price drops by 25%?
• Is the demand for this product elastic or inelastic? Explain why.
In addition to fully answering the assignment’s questions, each Assignment will be evaluated for clarity of writing, critical analysis of the issues, proper use of references to support the positions taken, and adherence to APA standards.
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