Question

Adam and Barb go to the store to purchase some lottery tickets. Without looking at the price, Adam says “I’ll take 10 lottery tickets,” and Barb says “I’ll take $10 worth of lottery tickets.” What is each person’s price elasticity of demand for lottery tickets? (Not a math problem) Explanation?

Answer 1

• Price epasticity of Demand tells the relationship between price and quantity demanded
• it is shown on the demand curve which is inversely slope in nature
• the value of price elastic demand for an elastic demand is greater than
• In inelastic demand ,the value of price elasticity of demand is less than one
• For unit elastic demand the value of price elasticity of demand is equal to 1
• an elastic demand is that type of demand in which even there is a small change in the price can cause heavy change in the quantity demanded
• in this the consumers are price sensitive
• opposite to it is inelastic demand in which even there is very high change in the price can cause is very low change in the quantity demanded
• in this consumers are not very much price sensitive

Now from the given question for Adam he is not price sensitive because he just want 10 lottery whatever the price

but in case of Barb he only buys $10 worth of lottery ticket it means he is clearly price sensitive

So Adam demand will be in elastic and Bard demand will be elastic demand