Answer to Question #195497 in Microeconomics for haider

Question

In the context of Pakistan’s society for each of the following products, indicate the correct type of price elasticity of demand or supply and also justify your answer:

.  An expensive necklace to be sold at an auction.

. Demand for COVID-19 Vaccine.

Answer 1

a. An exquisite necklace to be sold at an auction

The supply of an exquisite painting tends to be that of inelastic as its supply can not be increased even if the price of this necklace increases. From demand point of view, the exquisite necklace comes under a category of rare article which will be purchased by its consumers no matter at what price they're available. Therefore, their demand is also inelastic.

b. Demand for COVID-19 Vaccine

Elasticity of a demand of a commodity is influenced by its nature. In this case, COVID-19 Vaccine is surely a necessity for a COVID-19 treatment undergoing patient. Therefore, its demand is inelastic as it would be needed for survival.