explain these applications of price elasticity of demand 1-Large Crop Yields 2-Excise Taxes 3-Decriminalization of illegal...

explain these applications of price elasticity of demand

1-Large Crop Yields

2-Excise Taxes

3-Decriminalization of illegal Drugs

Expert Solution

Price elasticity is generally defined as the effective demand of something changes as per the changes in the prices of commodity .

1. Large crop yield

If there is large crop yield then it is sure that the prices of the crop will come down so it is the elastic.

2.excise tax:

Execise tax are fixed for a period of time so there is not a considerable change in the price so it is inelastic or the quantity didn't stretch much from its prior point.

3. Decriminalisation of drugs

If their is decriminalosation of drugs that will mean that the availability of these will increase and there will be a decrease in the prices so it is the elastic.

Rahul Sunny answered 2 years ago

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