Consider the following pairs of goods. For which of the two goods would you expect the...

Consider the following pairs of goods. For which of the two goods would you expect the demand to be less price elastic? Why?

a. Covid-19 vaccine or Patchi Chocolate

b. Drink in general or Almarai Orange Juice

c. Demand for cigarettes over a three months or over the course of three years.

d. Petrol or the Graff Diamonds Hallucination watches.

Expert Solution

A - Covid 19 vaccine will have less elastic demand because it is a medical necessity and hence price will not affect demand.

B - Drink in general will be less elastic because of a necessary good. Orange juice is not a necessity.

C - Demand for cigarettes over course of three Months will be less elastic. Demand is less elastic in lesser time period due to lesser substitutes.

D - Petrol will have less elastic demand because it is a necessity. Diamond watches is a luxury goods and hence its demand will be elastic in nature.

Rahul Sunny answered 1 year ago

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Consider the following pairs of goods. For which of the two goods would you expect the...

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