IB Economics SL Heitmann

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.

This article, published by Fortune Magazine on October 3, 2015, describes how the decline in global commodity prices has led to economic problems in developing countries. Also, these falling prices have impacted sellers of valuable primary sector goods such as the Middle East's Gulf States, which supply oil to much of the world.

Due to the bad weather in France, the quality of wheat used to make bread have been affected leading to an increase in the price of flour. Other factors that lead to the increase in prices include the Ukrainian crisis and the Russian ban on wheat exports. Because flour and wheat have many uses, the demand for these products will hardly be affected which makes them inelastic. Supply on the other hand will decrease because of the bad harvest faced by farmers.

Some key words "like determinants of price" of price which we learned in that week could have been used to explain why season affected the price of flour. With demand steadily increasing and supply diminishing Fonge could've talked about PED which she brought up but never used the term. In her comment she said wheat and flour being inelastic are not affected by any change in price so wheat has a low PED.

Investment firm, Bernstein, reaffirmed its Outperform rating on Apple, along with a price target of $135. The firm has noted the first weekend sales of the newest iPhone, which the company declared to surpass 13 million units. Its predecessor iPhone 6 managed to reach over 10 million sales volume in the opening weekend, which was a record back then.

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.

Raise in market price of soda in Chicago is discussed. Will it result in an increase in revenue and reduction in consumption? The PED suggests so. A similar policy was introduced in Mexico, and the soda there had a PED of 0,6, making it inelastic. Will the same happen in Chicago? Demand, elasticity and the PED are discussed in this article.

How exactly has this affected the elasticity? You should elaborate on price and its relation to demand and the PED. I agree that the raise in price would increase revenue and reduce consumption. However you contradict your previous point by stating that soda will become inelastic. I don't agree with you because soda is not a necessity and it is not healthy so if there is a raise in price and PED which will cause demand to decrease meaning it is elastic.

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.

Switzerland Considers Banning Volkswagen Diesel Car Sales Because there the scandal relating to the Volkswagen's pollution in diesel engines, Thomas Rohrbach, spokesman for the Swiss federal office of roadways decides he should ban all cars with diesel engine in the "Euro 5 emission category" including all VW cars. This could affect  180,000 unsold cars in the country

The head of a US pharmaceutical company has defended his company's decision to raise the price of a 62-year-old medication used by Aids patients by over 5,000%. Turing Pharmaceuticals acquired the rights to Daraprim in August. CEO Martin Shkreli has said that the company will use the money it makes from sales to research new treatments. The question here is whether it is morally defendable to increase revenue by increasing prices to an amount poor people cannot afford. He says the extra money will go to research, but is it worth making the medicine too expensive for poor people?

In the economy we see that the Milk is a need and it will be consumed by the people, no matter what the cost is. If this scenario, was based in the city then the increase of price would not matter, as it has many substitutes such as packaged milk and that too from different companies. This makes the PED elastic. But in the village, as the access to the packaged milk is less. They need the milk and therefore making the PED inelastic.

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.

Several prominent articles this year that have taken a position against energy efficiency have attracted enough press attention to require formal refutations. But these articles all have something in common: an ideological belief that markets work best unconditionally, and therefore that a carbon pollution fee is the "first-best" economic solution to climate change.

Forbes business prediction for the prices of US steel, published September 17th, 2015. US steel market is elastic, as many alternatives are available (steel from China, and other imports), causing the author to predict that US firms will reduce prices in an attempt to increase sales (and thus revenue). Also deals with government involvement in steel market.

This article focuses mainly on opportunity course. It's been established that opportunity cost is the cost of doing something rather than another. In this case the author focused on a student's decision to attend college and for how long. At least everyone has been through the phase where they looked at the price it costs to go to college but few go deep into things such as life, transport etc. There are others who decide to take a year off and travel; the opportunity cost in this is the education they could've been getting so they could stay on track and the money they wasted to travel which they could have used to further their studies or life needs. The author brought up a book by Laurence Kotlikoff in which he invented 4 kids and made them choose different life patterns. I felt this was smart because students can see how the choices they make now could impact their life later on. As expected the child who stayed in school to become a doctor made a lot of money, however, student loans and all other expenses leaves them with as much money as the next middle-poor man. Then again the other child who became a plumber and skipped college makes money but has no student debt. This is not to say that they are better off but it's just to clear the stereotype that the longer you stay in school the better off your life will be; there are many factors that play into it.