I'm trying to help one of my students with a question for his econ class. The question asks them to compare the relative price elasticities of the following three things: heart transplant surgery, lawn care, and tanning salons. I have a general idea how to answer but wanted to check if anyone here could give a good answer, as econ is not my strength. Thanks in advance!
Anonymous
Favorite Answer
Heart transplant surgery is inelastic. Lawn care and tanning salons are elastic.
brickman
You calculate the share of exchange in call for and then divide it with the share of exchange in cost..that's the cost elasticity..yet first you ought to calculate the share of exchange in the two element, like for call for you subtract the 2d quantity of call for with the 1st one and then divide it with the 1st one, in basic terms then you rather distinctive it with a hundred%..it is the form you count variety the share of exchange in the two components.. I in basic terms understand this..i can not truly clarify the definition of cost Elasticity of call for..So, desire this could help..