Answer to Question #262610 in Microeconomics for Clang

Question

hot dogs are 5 pesos for a package of 10 pieces at the grocery store. at the basketball game they cost 5 each. using the concept of the elasticity of demand, explain why hot dogs cost more at basketball game. answer key

Answer 1

Demand elasticity is a significant variant of the idea of demand. Elastic demand is one in which a shift in value causes a considerable variation in the volume desired. Inelastic demand is one in which the change in the amount sought as a result of a cost change is modest.

As the cost of a commodity decreases, the quantity wanted increases, so when the price of a good rises, the quantity demanded decreases. It is referred to as the law of demand. This rule of the market indicates only the direction of shift in the amount needed concerning price changes. This does not tell us how much the volume of items sought will vary regarding a price adjustment.

As a result, the price of hot dogs at the basketball game increased, resulting in decreased demand.