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In economy we always say food is always inelastic, diaries such as cheese, cheese, butter are considered necessity for people and the price should be inelastic with PED less than 1. As time is changing, the raise of price will cause less revenue, it's not as inelastic as it use to be. The government use to be the biggest clients and they have control over the elasticity of the product, which they aren't any more. There are also a lot more alternative to fluid milk as well. This is also relating to the FDA's view on butter, it use to be vilified and now it seem to be the best product available, people are buying butter, but as the price increase, they buy a little less. We see this change in restaurants as well, McDonald's are moving away from cheeseburger and pizza restaurant are putting less cheese on their product.

I think this shows how time also has an effect on elasticity. In the past dairy has been typically seen as an inelastic product but it is now viewed as an elastic product. There have also been growing amounts of substitutes to dairy products especially milk product substitutes.

This article looks into the reasons while dairy demand has become more elastic in recent years. In the past, demand for dairy products was fairly inelastic. However, that has changed. In the past, the US government purchased a large amount of dairy products which kept prices stable but that is no longer the case which has caused prices to destablize. Additionally, there are now many alternatives to fluid milk with more stable price. As a result, it has become the most elastic dairy product. Butter and cheese are less elastic. The article also mentions that restaurants and fast food restaurants drive the fluctuation in dairy demand.

Starbucks has raised its prices by 8%. Even though only about 20% of Starbucks consumers will be affected by these price increases they will not reduce demand. This is because Starbuck's coffee is a very popular and addictive product. A price increase barely has an effect on inelastic products like Starbucks packaged grocery coffee and K-cup single serve products.

The Russian recession has caused sales for luxury goods to drop. Many companies that sell luxury or tourism goods have seen the demand for their product significantly decrease since the recession. This is because these products have a negative income elasticity so as income decreases so does the demand for these products. The demand for tour groups and hotels has also decreased because of the recession. Since all of theses products have a negative elasticity once the income of the buyers in Russia decreases then so will the demand for them.

This article discusses the impact of the Russian recession on demand for luxury goods. The recession has decreased the income and spending power of many Russians which has resulted in a decrease in a demand for luxury goods (clothing, jewelry, etc.) and services (airfare, hotels, etc.). The demand for luxury goods is very elastic. This is because luxury goods are not necessities and consumers can survive without them. These goods often have a reasonable number of substitutes. They also require a relatively high proportion of income to be spend on them and are used over a long period of time. The Russian recession has impacted firms across the globe but especially in Europe where Russian consumers account for a large percentage of customers.

The price of coffee has been going up and will keep at it but this doesn't seem to affect demand as demand is still increasing. Now quality is not affected by price. These can be based on the fact that the product is addictive and not many substitutes will suffice. Some even think of it as a ritual every morning.

I agree that coffee is inelastic because it is typically contains caffeine which is an addictive drug. People are addicted to coffee and depend on it as part of their daily lives. They cannot function without it, or are at least unwilling to. Therefore, consumers will continue to purchase coffee despite rising prices. Coffee drinkers also enjoy the last of coffee and are not willing to switch to other caffeine filled drinks such as tea or soda because they are not close enough substitutes. In fact, coffee consumption has actually increased despite rising prices. Consumers will not change their tastes unless prices become drastically higher.

i agree with the point that the change in qunatity demanded is not very significant. This is due to the fact the coffee is a habit forming good and addictive to most coffee addicts. However it also depends on the proportion of income spent on the good. Coffee prices can range from being dirt cheap at hawker centres to expensive at cafes like Starbucks. Hence even if the consumer is not a coffee addict, and only a small proportion of income ( if it is 'insignificant' ) is spent on the good, then a change in price will not affect the spending behaviour ; demand is price inelasic

The article discusses the increase in the minimum wage and its effects on employment as the government struggles with the rise of inequality over the previous years. David Neumark an economist at university of california argues in his paper that a high minimum wage wage may not be effective in tacking poverty. Other impacts on the increase in minimum wage is higher productivity on the other hand labor is so cheap that there is less incentive to increase the wages. Higher minimum wages could boost the economy and if employers focused on high-skilled workers in the short term, that could boost productivity and the economy in the long term, eventually providing jobs for the low skilled.

This article shows that a limited liability company named Linn Energy had their stocks lose value heavily, as well as a massive revenue decrease. This happened because of the oil bust, which was a massive decrease in demand for oil. Since the oil demand was becoming elastic due to the fact that it was a necessity for which alternative methods had been or started to be found (coal, solar energy, etc.), there was not much that could be done about the decrease in demand, which in turn took a toll on Linn Energy.

The oil bust definitely would cause a decrease in demand but it would also cause a decrease in supply because a bust is a "decrease in economic growth and production." I however have to say that u probably misunderstood the concept of elastic and inelastic. Oil demand would be inelastic because oil is a product that is necessary for a lot of human activities and since it is a necessity, demand would be inelastic and not elastic.

This article shows what the problems could be if the households/consumers/workers demanded higher minimum wages. On research in this article says it will decrease employment and give less incentive to the firms to HIREpeople and give them higher wages. However, another studies show that firms might cut back on some benefits for the worker, they might improve the productivity of the product. Moreover, the workers might as well work harder. And much more. The point is that the workers will do whatever it takes to have a high income. Thus it is possible to say that higher minimum wages could improve the economy because then, the national income will rise. And then this will increase the overall GDP of the country, leading to a higher economic growth.

Chipotle's supply of avocados have reduced and because of this the price of their food has increased. This involves a non-price determinant which is because it became harder to obtain a product its price increased which also caused the price of another product to increase.

I also choose this article because it was a good article about supply and i also like to eat at chipotles

P3.01 Favorite Article. Temitopes article is my favorite article because its about chipotle. This article covers pretty much all the aspects that we have learned so far. It shows demand, reply and elasticity all because of how chipotle increased the price because of the low supply of avocado.

This article speaks about the increase in demand for organic food. I find this article really interesting as it speaks about how tastes and preferences, one of the determinants for demand pushes for this increase of availabilty in organic products. As evidenced by the article , consumers are now more conscious of what they eat and are adopting a healthier lifestyle. This information is really beneficial as not only can the organic food industry increase its sales , but all other industry related to health and fitness such as production of vitamins , fitness programmes , exercise machines can also react to this trend and increase their supply to meet the consumer's demand. It is also mentioned in the article that organic tea and coffee were highly in demand in 2014. Hence coffe cafes such as Starbucks and Coffeebean can also increase their sales if they react to the health conscious trend by introducing organic beverages in their stores. To conclude , it is important for producers to study the trends of consumers so that they can react accordingly in order to increase profits or avoid losses.

An externality occurs when the production or consumption of a product has an effect on a third party. Although the externality that is generated can be positive, the externalities of consumption generated by smoking are all negative, and this is one of the biggest examples of a negative externality of consumption. Passive smoking poses external costs to third parties in this case children where no appropriate compensation is made.

The article describes how the decrease in demand affects the macroeconomics, due to suppliers of coal and petroleum using the railroad to transport their goods. The decline in railroads has caused greater competition, raising the cost of production for these goods, as using the railroad service will be more expensive at times.

China and South Korea have been accused of dumping washing machines to the US, however, these claims no longer hold as new models are equitably price, but are of higher qualities than the North American home appliance producers'. The article discusses to which extent China and South Korea have been dumping products or whether it is western countries excuse to protect their own markets.

Market failure in the fuel market led to government intervention, in order to decrease the consumption of fossil fuels. The marginal social benefit would hopefully be reached by this, but the government intervention did not go as planned. Supporting certain biofuel producers caused a decrease in production of other biofuels, resulting in little change in the fuel market after all.

Christian Wienberg illustrates how expansions and contractions have an effect on the global economy. Recently there has been a contraction, illustrated by the decrease in consumption, thus production and trade. The business cycle would suggest a recovery soon, because of lowered inflation or even deflation.

To battle China's decreasing economy government has decided to increase it's tourism sector hoping the increased revenue can help the economy as well as boost domestic spending. If society itself does not spend how is it expected to generate profit. However in order to make sure tourists know of the new sector they are creating advertisement would have to be paid for or else there could rise the possibility of a market failure that occurs with positive externality of production

I have found this article suprisingly amusing as I am a chocolate lover. The article talks about the fact that the world demand for chocolate is outgrowing the cocoa beans available. Therefore the prices are rising dramatically, especially in Asia. The author assumes that by 2020 the prices will be extremely high, because the demand is becoming unsustainable. I believe that this is a great article to illustrate what I have learnt in the past chapter because it illustrates a real world situation where the price rises with the supply.

Dairy prices have seen a drop lately because of high demand farmers increased the number of cows that produce milk, then again dairy is a primary product and as we learned this week, there is only so much a population can consume of a primary good, and too much supply with an un-proportional demand calls for a decrease in price in order to form another equilibrium.Although the PED for milk is inelastic, it's still a limited primary good and the supply of this having increased creates high PEs especially since season does not affect cows.

This article looks at the Elasticity of Demand and Supply for oil. The increased costs of the production and higher prices are not leading to a fall in demand, but instead a fall in the elasticity of demand.

This article fits in my opinion very well to the topic of elasticities. It deals with price elasticity of both supply and demand for oil. The author is concerned with the increasing inelasticity of supply: "reserves we're now exploiting are not only more expensive to develop, but they also take much longer between the time the first well is drilled and the when the first oil is produced". There's also a graph in the article which shows the constant fluctuations of both supply and demand for oil, and how the American oil supply struggles to adjust itself to American demand for oil.

This article addresses the changes that have occurred in the oil market over the past ten years. The author claims that changes in the demand of oil have increasingly been playing a role in maintaining the supply/demand balance. He argues that these changes will be burdensome to our economy unless the demand for oil is made more flexible. According to the article, there is not a shortage of oil. Today, due to rising oil prices, we are able to exploit oil reserves which were previously too expensive to exploit. Since these new oil reserves are more expensive to develop and take longer to access, the time it takes for oil supply to respond to changes in price is increasing as well. This means that "...the oil is becoming less elastic..." meaning that "a large change in price produces a small change in supply." In regards to the elasticity of demand, "the elasticity of oil reflects the options we have to using oil for our daily needs." Our ability to reduce oil consumption is fairly limited in the short term, but increases over the long term. However options for reducing oil consumption over any time period are often inconvenient. Reductions in demand due to high prices can be called demand destruction (a permanent move down the demand curve toward reduced demand) which can be detrimental to the economy. This is why people such as the media and politicians wish to have supply adapt to changes in demand instead. However, "there are also limits to the ability of oil supply to adjust." Oil is not easily accessible. Because oil supply has become less elastic, prices has had to become more volatile to force market adjustments. The author concludes by suggesting ways that the elasticity of oil demand can be increased and the pain of demand destruction decreased.

With the lower prices less oil production falls. The lower prices also leads to less capital into the market and smaller companies with loans will struggle to pay back due to less revenue and profit. Some may have to declare bankruptcy. It is almost impossible to increase prices, because then other firms will offer cheaper oil and win your customers. The PED of oil is close to infinity and the XED between the oil of two different companies are a very high positive value

This article talks briefly about how commodities are traded between different places. It talks about how the goods are traded for a specific price then how "many traders use commodity futures to speculate on future price movements." in which they product will be sold on the market