What Are The Major Determinants Of Price Elasticity Of Demand

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What Are The Major Determinants Of Price Elasticity Of Demand

? Use those determinants and your own reasoning in judging whether Demand for each of the following products is probably elastic or inelastic: (a) bottled water; (b) toothpaste; (c) Crest toothpaste; (d) ketchup; (e) diamond bracelets; (f) Microsoft Windows operating system.
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The major determinants of price elasticity of demand are substitutability, proportion of income, luxury versus necessity, and time. a) Bottled water is probably elastic because there are many different substitutes for it like tap water, water fountains, and other drinks in bottles. b) Tooth paste is probably inelastic because there not many substitutes and it is a neccessity. c) Crest toothpaste is probably elastic because there are many other brands you can substitute for this brand. d) Ketchup is likely inelastic because there are not many substitutes for ketchup and it makes up a small percentage of income. e) Diamond bracelets are probably elastic because it is a luxury good and may make up a larger fraction of income. f) Microsoft windows operating system is probably inelastic because there are not many subsititutes and it has become a neccessity for workplaces.
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