Find the factors responsible for difference in elasticity

Assignment Help Managerial Economics

Reference no: EM1372028

Type of Elasticity Estimate

Relatively elastic (E>1)
Airline Travel, long run 2.4
Fresh Fish 2.2
New cars, short run 1.2 - 1.5

Unitary elastic (E=1)
Private Education 1.1
Radios and televisions 1.2
Shoes 0.9

Relatively inelastic (E<1)
Cigarettes 0.4
Coffee 0.3
Gasoline, short run 0.2
Long-distance telephone calls 0.1

Questions
A) How large of a tax-induced value raise would it take to decrease cigarette consumption by 20%? Show work.
B) Identify three goods each for which your demand is (a) elastic and (b) inelastic. What accounts for the difference of elasticity? Explain thoroughly.

Reference no: EM1372028

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