Group items tagged

This article talks about how the PED for different food types varies in the country Australia. The Rural industries research and development in Australia reveals that foods such as Milk, bread, fresh fruit and fresh vegetables have an inelastic demand. This therefore meaning consumers will continue to buy these products even when there is an increase in price. In this case the value of PED would be 1 Research and Development also showed that PED for meat products was more elastic in Australia than in other countries. As a result meaning, consumers in other countries will be more willing to absorb an increase in price.

This article talks about the idea behind Starbucks and how they increase their prices. It establishes a connection between PED and PES. It also talks about how we gone from not appreciating coffee to becoming a caffeine addicted economy.

This article explains how price changes affect the demand of a product, PED. In this case, customers react differently to price changes in beef depending on other factors. I think this article shows a clear picture of how the elasticity of demand is affected by consumers and their consumption of beef.

Vodafone users are now faced with a possible 10% increase in price to their monthly bill payments. This increase in price will affect the demand of the Vodafone negatively. Vodafone has anticipated this and is allowing its customers to leave contracts in search of cheaper phone contracts. The PED of Vodafone is greater than one (and therefore elastic) because the change in price created a drastic change in demand demonstrated by Vodafone's poor performance in the phone market.

This article basically discusses how a raise in minumum wage would affect restaurants, spcially fast food restaurants such as McDonalds. As President Barack Obama propeses to raise the minumum wage to 10$ many fast food companies disaggree him saying that their customers are price sensitive and this increase in their cost would haveto reflect onto customers which would drive them away. However data says otherwise. The article indicates that the prices of fast foods are ectually inelastic and therefore an increase in price although would mean less customer it doesn't necesserily mean less revenue

I think this article is a very good choice as it shows the effect the elasticity can have in real life situations. I think in this situation we also have to appreciate the recognition that the company Mcdonald's has ;this could influence elasticity being inelastic. As Mcdonalds is a very popular ,globally known fast food restaurant they may find that a small increase in price will only affect their demand in a small way. So like you said it doesn't necessarily mean less revenue. Jack

This article is about the price elasticity of the gas. It states the fact that even though people are unhappy about the increasing prices, they can't change their habits of consuming the same gas supply which totally means that gas is inelastic in this case and in order for them to change their consumption patterns, there has to be an even greater increase in the gas price

With gasoline prices in the U.S. approaching an average $3 a gallon, Americans are moaning about the rising cost, but so far they are resisting big changes in their gas-guzzling ways.

The price of cigarettes has been radically increased in Australia as the mortality rate of smokers has become extremely worrying. This relates to this week's topics because it shows how raising the cigarette price in such a radical way will decrease the demand, which is the aim of health services. The PED of the cigarette is therefore elastic, as it will lower the demand more than the % change in price because it is such a large leap of price.

This article discusses how the music industry has been changing the price of music because people are only willing to buy music if it is cheap given that it is pleasurable to us but not necessary. It also talks about how CD sales are declining because of the ease of online digital music.

A study from the Brookings Institution, a think-tank, finds that poverty in America has become more concentrated over the past decade. During the 2000s the number of neighborhoods with poverty rates of 40% or more climbed by three-quarters. Poverty is rising in the suburbs however, and it might be because of inaccessability to good jobs - not the other way around. People cannot find jobs and although USA is 5% unemployed, inner cities and specifically black communities have a 40% unemployment rate. People are trying to get work too, there just isn't a supply of enough jobs - personally I think this is due to outsourcing, if everything just stayed in the USA then we would have thousands of more jobs available. The problem at hand is a falling in availability of jobs, along with an increased population and people searching for jobs. Due to companies trying to make more money, we have outsourced most of our available jobs in elastic goods to other countries. In this way we have ruined the economy for ourselves, or at least big companies have. Inelastic products do not have this same issue, yet they still outsource because they are greedy. Pretty crazy to think about. Perhaps if everything cost a bit more money, and we weren't allowed to outsource, then the PED would go down and people would pay more for goods because they would have more money to spend due to increase in number of workers.

Russia's economy is suffering from falling oil prices as oil revenue makes up about half of the state budget revenue, while the sanctions imposed by the West in response to Moscow's policy toward Ukraine have almost shut the global financial markets to Russian business. Since oil has the inelastic demands, the fall in price of it will proportionally change the quantity demanded, however if the Russian business decide that oil is not profitable business anymore, they might switch to its substitutes, or if the supply of oil significantly decreases during next few years because of the fall in price of it, the demand for oil might decrease as well and people will again consume its substitutes, such as wood or gas, in greater quantities. If low oil prices and Western sanctions persist for some time, Russia's economy and budget will have to optimize their spending, and concentrate only on profitable budgetary programs, which will not have only major consequences on Russia, but the Europe as well as Russia is one of the main oil suppliers.

Prices for oil, an inelastic product, have decreased leading to a decrease in revenue for the producers, leading to concerns that this might have more widespread economic ramifications in the future.