Price Elasticity of Demand

This article discusses the concept of price elasticity of demand for phones, alcoholic drinks, and healthcare. It explores the factors that affect demand elasticity and the implications for different types of goods. The demand for phones is highly elastic, except for certain professional needs. Alcoholic drinks have varying levels of elasticity, with some types being more inelastic due to customer loyalty. Demand for healthcare services is income-resilient, but certain types of care, such as preventive care, are more price-sensitive.

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Price elasticity of demand
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Price Elasticity of Demand for Phones
The mobile phone market is highly elastic. Mobile phones are not a necessity and there
exists as many phones as possible out there. It therefore means that if prices go up, fewer people
would purchase new phones.
However, for certain professionalism, the demand for mobile phone is inelastic. An
example is an on call doctor who requires phones at any circumstance. Another example is for
the case of an upper level business people. Anybody who is needed by the above mentioned
people will only be reached via a phone call in most cases and therefore this makes the demand
for phones inelastic. The last example is for the price elasticity of demand for iPhone (Ayashi,
Friedel, & Foreman, 2019). The price elasticity of demand for iPhone is inelastic as compared to
the other podiums. The demand for iPhone is in most cases more vertical. The latter means that
when the value of an iPhone goes up, the demand is not affected to a large extend. IPhone is a
necessity good i.e. a good that people cannot literally live without. The latter made possible as a
result of efficiency in the customer service, the effects in the ecosystem whereby the possession
of the products from the company earns someone more value, the uniqueness and excellency in
the design and materials and also due to the fact that there is a global distribution for this product
(Dong & Song, 2018).
On the other hand, the price elasticity of demand for smartphone is highly elastic. High
elasticity means that a small change in the price of android will lead to a great effect on the
demand. This is because android is a commodity that has a commodity software and services.
There is minute or even at times no difference among the Android OEMs besides price
(Economides & Przemyslaw , 2017).

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Price Elasticity of Demand for Alcoholic Drinks
The average price elasticity for alcoholic drinks as a whole is -0.4 ad this implies that the
prices are highly inelastic in terms of the changes in prices. The high inelasticity is caused by the
consumption at the individual level which is induced by the habits of the consumer. There is also
a natural threshold for the alcoholic beverage consumption. Increased health concerns amid
socioeconomic groups can also have an impact on the elasticity of demand (Amlung, MacKillop,
& Monti, 2017). The socioeconomic groups can create a limit on alcohol and this can easily lead
to decreased demand sensitivity to the price changes.
However, the points of universal elasticity of price varies significantly across different
alcoholic drinks the blended scotch whiskey is the most inelastic alcoholic drink with -0.07 the
followed by cognac with -0.12.the inelasticity in these drinks can be attributed to the loyalty of
the customer base who prefer these drinks and hence purchase them more frequently as most
consumers tend to purchase expensive drinks less frequently. There is another category referred
to as premixes. The premixes are alcoholic drinks that have the highest elasticity as compared to
all other alcoholic drinks (-1.82). Consumers who possess high strength premixes and other
related ready to drink products are mainly young people generally tend to be more conscious to
prices and thus are high sensitive to any percentage change in prices.
Price elasticity of alcoholic drinks varies between countries and this suggests different
elasticity all the same. The sparkling wine has low universal price elasticity of -0.39 but this
varies between the developed and developing countries.in developed countries, sparkling wine
has a price elasticity of -0.79 in the developed countries while the same drink has - 0.31 in
elasticity in the developing countries (Dong & Song, 2018). The difference in the elasticity of
price for sparkling wine means that the wine is broadly consumed in the developed countries

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than in the developing countries and in the instances of price increase, there is a tendency of
consumers to react stronger in purchasing than they do in the developing states. The table below
shows the price elasticity of wine in DCs and LDCs.
(Economides & Przemyslaw , 2017).
Price Elasticity of Demand for Healthcare
Demand for medicinal services administrations is income resolute. The salary flexibility
approximations for this situation are under a collection of 0 to 0.2.The positive indication of
versatility degree demonstrates that a small amount of income expanded with an expansion in the
interest for human services. The level of flexibility by the by proposes that there is a moderately
low reaction to the interest .The investigations that have been done on the time arrangement
information propose that there is more noteworthy income malleability (Hernández-Izquierdo,
López-Valcárcel, & Morris, 2019). The distinctions that happen through time are brought about

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by the joining of the effects of the adjustments in the wellbeing aptitude that use the long time
arrangement of insights.
The final offer flexibility for Medicare is commonly low. Be that as it may, specific kinds
of consideration are commonly value delicate. Instances of these sorts of medicinal services
incorporate preventive consideration and drug store gains. The last have been noted to have huge
value flexibility. The final proposal for prudent consideration is more unpretentious than the final
offer for some other kind of medicinal services. The accessibility of substitutes is an essential
determinant of the flexibility of interest (Chaloupka, Powell , & Warner, 2019). To the extent
human services is worried; there are a few merchandise and ventures that can fill in as surrogates
(Iang & Livingston, 2018). At the point when the costs of medicinal services go up, the buyers
will in this manner have a decision of moving to the substitutes and stay away from the
preventive consideration (Roos & Van , 2018). They will devour those choices which advance
wellbeing including the nourishing supplements and furthermore solid sustenance. Prudent
remedial consideration administrations may likewise be considered as to a greater extent an
extravagance decent than a need decent. At the point when the cost of preventive human services
cost goes up, at that point the shoppers may then remove the preventive medicinal consideration
administrations (Ellis , Martins, & Zhu, 2017).
Conclusion
As discussed above, there are different types of elasticities and a particular type of good
will assume a particular characteristic. The degree of responsiveness on a particular good to
change in the price will also depend on several factors like the demographic factors, levels of
income and customer loyalty.it is good to incorporate each of the above factors when
determining the kind of elasticity for a given good.

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References
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Ayashi, A., Friedel, F. E., & Foreman, A. M. (2019). A behavioral economic analysis of demand
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Chaloupka, F. J., Powell , L. M., & Warner, K. E. (2019). he Use of Excise Taxes to Reduce
Tobacco, Alcohol, and Sugary Beverage Consumption. Routledge: Routledge.
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Estimation of Mobile Money. Routledge: Routledge.
Economides, N., & Przemyslaw , J. (2017). "Compatibility and Interoperability in Mobile
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Ellis , R. P., Martins, B., & Zhu, W. (2017). Health care demand elasticities by type of service.
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Hernández-Izquierdo, C., López-Valcárcel, B. G., & Morris, S. (2019). The effect of a change in
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Iang , H., & Livingston, M. (2018). Price elasticity of on-and off-premises demand for alcoholic
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Roos, A. F., & Van , D. E. (2018). Does price competition damage healthcare quality?. Chicago:
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