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The Price Elasticity of Demand
The price elasticity of demand is people's responsiveness of quantity demanded (or consumption) when there is a change in price.
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?
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