List the Following Goods in Order of Increasing Price Elasticity

question 50

Essay

List the following goods in order of increasing price elasticity of demand and explain why they are ranked that way: a first class ticket to your dream holiday destination, a two-day ferry cruise, a local bus ticket to work, hiring a sports car for a day.

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Definitions:

Diminishing Marginal Returns

An economic principle stating that as one factor of production increases while others remain constant, the incremental gains in output will eventually decrease.

Input

Resources such as labor, materials, and capital used in the production of goods and services.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.

Output

The total quantity of goods or services produced by a firm or economy over a specific period.