Final answer:
Price elasticity of demand measures how sensitive the quantity demanded of a product is to changes in its price. Products like ketchup and toothpaste are price inelastic because they are considered necessities, while products like movie theatre tickets and diamond bracelets are price elastic because they are considered luxuries.
Step-by-step explanation:
Price elasticity of demand measures how sensitive the quantity demanded of a product is to changes in its price. If the demand for a product is price elastic, a small change in price will lead to a proportionately larger change in quantity demanded, indicating a high price elasticity. On the other hand, if the demand for a product is price inelastic, a change in price will result in a proportionately smaller change in quantity demanded, indicating a low price elasticity.
Based on this, we can judge the price elasticity of the given products:
- Ketchup: Ketchup is likely to be price inelastic because it is a condiment that people consider to be a necessity rather than a luxury item.
- Toothpaste: Toothpaste is also likely to be price inelastic because it is a necessity for maintaining oral hygiene.
- Covid vaccines: Covid vaccines are likely to be price inelastic as they are essential for protecting public health and preventing the spread of infectious diseases.
- Movie theatre tickets: Movie theatre tickets are likely to be price elastic as there are alternative forms of entertainment available, such as streaming services and home theater systems.
- Bottled water: Bottled water is likely to be price inelastic as it is often considered a necessity, especially in areas where tap water is not safe to drink.
- Colgate toothpaste: Colgate toothpaste is likely to be price inelastic as it is a popular brand and has a loyal customer base.
- Diamond bracelets: Diamond bracelets are likely to be price elastic as they are luxury items and consumers have a variety of alternative options when it comes to jewelry.