3.4: Discussion: Economics and Theory - Elasticity for Similar but Not Identical Goods (Ch.5)

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Elasticity for Similar but Not Identical Goods

Sometimes, conditions of a market can be sensitive to a very specific good. For example,price elasticity of demand for conventional electricity is relativelyinelastic, whileprice elasticity of demand for solar panels is relatively elastic. Both goods perform the same task, yet one is much more elastic than the other. For this discussion, your task is to:

1. Come up with a pair of goods that, like electricity and solar panels, perform very similar tasks, yet have different stories to be told when it comes to elasticity.
2. Explain why your goods will experience such a difference in elasticity.