Question

Consider two markets: the market for prescription blood pressure medications and the market for Kraft Macaroni and Cheese. Which of these goods do you think has the more elastic demand? Explain your reasoning. please use ur own words

Answer 1

The elasticity of demand is mainly defined as the percentage change in quantity demanded due to a percentage change in the price of a product. This is mainly an indication of pirce responsiveness of a certain product's demand.

We must note that the products which are essential such as daily needs, medicines do not have any major elasticity issue as these are the basic requirements which a person will always fulfill and in order to fulfill these demands, he or she can think off cutting the expenses on other products,

As we are dealing with two products prescription blood pressure medications and Kraft Macaroni and Cheese. In these two products, prescription blood pressure medications are the medicines and if a person is suffering from the problem of blood pressure, it is important for that individual to have these medicines else it can have a negative impact on the health. Thus if there were an increase in the price of these medicines, the patients are not going to reduce the consumption of the medicines, they have to take the medicines as prescribed by the doctors. So price increase or decrease will not have any major impact on the demand. Thus the demand for prescription blood pressure medications will be inelastic.

On the other hand, if a person is consuming Kraft Macaroni and Cheese which is not an essential commodity and there is an increase in price, the customer can either reduce the consumption or switch to other alternatives. Thus there is a greater impact of price change on the demand of Kraft Macaroni and Cheese and thus it is more elastic.

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