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Specify the product as luxury or necessity

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Reference no: EM13851140

The product can be Dunkin Donuts coffee or anything else if it works better

Price Elasticity of Demand measures the extent to which the quantity demanded of a good or service changes when the price of the good or service changes, ceteris paribus.

Income Elasticity of Demand measures the extent to which the quantity demanded of a good or service changes when the income changes, ceteris paribus.

Answer the following 5 questions. Type your answers and submit a hardcopy of your written answers to the instructor in the class on the due date. Don't email your written answers to the instructor, this is not an online course and your submission by means of emailing will not be accepted or graded. You need to attend the class and submit a hard copy of your written typed answers to the instructor.

1. Pick a business that you know something about or can find information on. Briefly describe the business and its main product or service.

2. Specify the product (described in 1) as luxury or necessity.

3. Specify price elasticity of demand for the product (described in 1) as elastic or inelastic. Briefly explain why.

4. Specify Income elasticity of the product (described in 1) as greater than one or smaller than 1. Breifly explain why.

5. Based on your answer to 4, specify your product as Normal or Inferior. Briefly explain why.

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