Inelastic demand and elastic demand

Reference no: EM1312140

Pharmaceutical drugs have an inelastic demand, and computers have an elastic demand. Suppose that technological advance doubles the supply of both products (that is, the quantity supplied at each price is twice what it was).

1. What happens to the equilibrium price and quantity in each market?

2. Which product experiences a larger change in quantity?

3. Which product experiences a larger change in price?

4. What happens to total consumer spending on each product?

Reference no: EM1312140

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