- #1
domyy
- 196
- 0
Hello!
I know that inelastic demand is normally linked with necessities.
However, if I have a superior good, and there´s an increase in price, customers still would buy the product because of the prestige, the brand.
So, I am writing a paper about a firm and my professor wants me to discuss ALSO the elasticity of demand for my product - which happens to be a superior good.
I know that increase in price lead to more revenue for my firm. So I must say my product is inelastic. However, I am reluctant to say this because, as I said, I studied that normally only necessities are inelastic.
I talked to my professor and asked if instead I could mention my product had a high income elasticity of demand and that would make more sense. But he said no.
So, can I simply say my product is inelastic if it´s a superior good but increase in price lead to higher revenue?
Or I should say my product is elastic; elasticity greater than 1?
Because they all sort of make sense to me
I know that inelastic demand is normally linked with necessities.
However, if I have a superior good, and there´s an increase in price, customers still would buy the product because of the prestige, the brand.
So, I am writing a paper about a firm and my professor wants me to discuss ALSO the elasticity of demand for my product - which happens to be a superior good.
I know that increase in price lead to more revenue for my firm. So I must say my product is inelastic. However, I am reluctant to say this because, as I said, I studied that normally only necessities are inelastic.
I talked to my professor and asked if instead I could mention my product had a high income elasticity of demand and that would make more sense. But he said no.
So, can I simply say my product is inelastic if it´s a superior good but increase in price lead to higher revenue?
Or I should say my product is elastic; elasticity greater than 1?
Because they all sort of make sense to me
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