The Price Elasticity of Demand [WLOs: 1, 2] [CLOs: 1, 2, 3]
The price elasticity of demand is people’s responsiveness of quantity demanded (or consumption) when there is a change in price. Prior to beginning work on this discussion forum, read Chapter 4 of the textbook.
Respond to the following:
• Identify the determinants of the price elasticity of demand. Explain each one.
• Determine whether each of the following items is elastic or inelastic: bottled water, gourmet coffee, Apple cell phones, and gasoline. Explain your reasoning.
• Distinguish between a necessity and a luxury.
• How are the price elasticity of demand and total revenue related? Why is the price elasticity of demand important to pricing?