Demand Elasticity

Demand Elasticity
Name
Institutional Affiliation

Demand Elasticity
Elasticity varies from product to product and from service to service since some goods and services are more essential than others. Essential products are less sensitive to price changes. This is because consumers will continue buying them for their survival no matter how prices change (Goodwin, 2004). Conversely, an increase in the price of goods and services that are less essential, that is which have got substitutes might discourage consumers. This is because the cost forgone for the product will increase.
Goods and services which are not essential in the daily life present elastic goods while the goods and services which are required to make the daily life a possibility are inelastic goods. The airline tickets that have been purchased present elastic goods since other services can be used in place of the airline tickets. For instance, there are other options for traveling which are even more cheaper. Thus, one would not need an airline ticket except in instances where the distance to be covered is long. Otherwise one might choose a more economical means which will serve the same purpose (Goodwin, 2004). Conversely, paying electricity bills is necessary since there is no alternative service that one can use. Electricity is a prerequisite especially for making daily operations a success.
If I assume a managerial position of any store, I will sell inelastic goods and services. This is because they are required in daily life, and thus there is no one time that demand for these goods and services will fall.

There is also less competition since there is no alternative option for these goods. This means that it is a must for individuals to use the goods because they need them and even when the prices of the goods change the demand will still be high.

Reference
Goodwin, P. (2004). A Review of New Demand Elasticity with Special Reference to Short and Long Run Effects of Price Changes. [eBook] JTEP, pp.155-163. Available at: http://www.bath.ac.uk/e-journals/jtep/pdf/Volume_XXV1_No_2_155-169.pdf [Accessed 29 Jan. 2018]