Uses and habit forming commodity -price elasticity of demand, Microeconomics

Uses and Habit Forming Commodity -price elasticity of demand:

The number of possible uses:

A commodity has high price elasticity of demand (or elastic demand) if it can be put into so many users. With such a commodity, if the price changes, the responses of quantity demanded to the price change becomes significant when changes in quantity demanded for each use are put together. For instance, a commodity such as sugar is used for direct comsumption, baking bread and cake, making jam etc. Thus,
the demand for sugar may be fairly elastic.

Habit Forming Commodity

Some commodities are habit corming while others are not.For habit forming commodities, they tend to have less elastic or inelastic demand because once the habit is formed it is abit difficult to break away from it when the price of the commodity increases even significantly. For instance, once the habit of smoking cigarettes is formed, it is difficult to break away when the price of cigarettes rise. Non-habit forming commodities tend to have more demand.

Posted Date: 1/2/2013 7:03:05 AM | Location : United States







Related Discussions:- Uses and habit forming commodity -price elasticity of demand, Assignment Help, Ask Question on Uses and habit forming commodity -price elasticity of demand, Get Answer, Expert's Help, Uses and habit forming commodity -price elasticity of demand Discussions

Write discussion on Uses and habit forming commodity -price elasticity of demand
Your posts are moderated
Related Questions
The accompanying table represents the price and yearly quantity sold of ice cream cones on Sidfield Island.   Price of Ice Cream Cones Quantity of Ice Cr

Calculate the enthalpy change for stepE. that is for the reaction: Na(s)+ water (arrow) Na(ion)+ OH(ion)+ Hydrogen (g)

The reduced row echelon form of  A=    is equal to R = (a)  What can you say about row 3 of A? Give an example of a possible third row for A. (b)  Determine the values o

How to calculate new profit earn by a firm in oligopoly if another firm cheat

In a perfectly competitive market the price of the product is?

using demand and supply curves explain how shortage and surplus are created

concept of supply and the factors that affect the supply

A government official announces a new policy. The country wishes to eliminate its trade deficit, but will strongly encourage financial investment from foreign firms. Explain why su

A spherical wave is reflected from a planar mirror sufficiently far from the wave origin so that the Fresnel approximation is satisfied. By regarding the spherical wave locally as

Durability of the Commodity: With some commodities, we require one at a time and they are used for a very long time before they get spoilt. Examples of such goods are cars, tele