Question

Determine which types of cutomers are likely to have a more elastic demand and which types of customers are likely to have a more inelastic demand. Make sure to place token in a bin.
More Elastic More Inelastic

a. Customers who are good at shopping around

b. Customers who know what they like and just buy it

c. Customers who walk up to a rental car desk right off of the plane

d. Customers who reserve a car online weeks before a trip

e. Customers who must have the latest fashion

f. Customers who can wait to buy fashionable items

Answer 1

Elastic demands are,

1. Customers who know what they like and just buy it.

2. Customers home Reserve a car online weeks before a trip.

3. Customers who can wait to buy fashionable items.

Inelastic demands are,

1. Customers who are good at shopping around.

2. Customers who walk up to a rental car desk right off of the plane.

3. Customers who must have the latest fashionable items.

Explanation:

Elastic demands are demands noticed when a manufacturer decreases the selling price of a particular product by x%, the number of units demanded/sold will increase accordingly. For example, if the price of a hot selling mobile phone will drop by 10%, its demand will dramatically be increased by more than 50%.  Elastic demand is when the customer will wait to buy a good till their price reaches to their own preferences.

Inelastic demands are demands noticed when the demand for a particular product won't change much if the price is increased or decreased. For example, if the tariffs of prepaid and postpaid mobile phone users are increased by 1%, number of subscribers won't decrease but remain almost the same. Inelastic demand is when the customer would buy the goods irrespective of the price.