The Economic Way of Thinking 13th Edition by David Prychitko, Peter Boettke, Paul Heyne

Exercise 17

What makes demand curves elastic or inelastic?
(a) How do you think e-mail has affected the elasticity of demand for snail mail provided by the U.S. Postal Service? Do you think the Postal Service is pleased by the results?
(b) The demand for aspirin at currently prevailing prices seems to be highly inelastic. What do you think would happen to the elasticity of demand if the price of aspirin relative to everything else were five times as high? Fifty times as high? Why?
(c) Is the demand for prescription drugs elastic or inelastic? Why? Do you agree with the statement sometimes made that the prices charged for prescription drugs can be freely set by the manufacturers, since people must buy whatever the doctor prescribes?
(d) What effect has iTunes had on the price elasticity of demand for Traditional compact disks?
(e) In the 1980s, a number of IBM clones appeared in the PC industry. What effect would that have had on the elasticity of demand for IBM personal computers?