If I owned my own business, the price elasticity of demand would impact my pricing decisions significantly. Price elasticity of demand would help me determine how adjusting the price I charge would impact the demand for my product. If I were selling a product with a high level of elasticity, the price at which I sell my product would cause a significant change in demand. For example, if I sold luxury clothing, the more | raise my prices, the more demand falls. However, if I sold an inelastic item, such as eggs or milk, demand would not fall as hard if prices were to increase. These examples highlight how important price elasticity is and how much this importance can vary among industriethypes of items being sold. Determinants of price elasticity of demand are factors or considerations that can influence the level of price elasticity. These include the availability of close substitutes, necessities versus luxuries, and definition of the market. The availability of close substitutes can cause items to be more elastic. For example, an item like soda is highly elastic clue to having many substitutes. For example, if the price of a can of Sprite were to increase but the price of a can of 70p stayed the same, the amount sold of Sprite would fall drastically. Necessities versus luxuries would impact the price elasticity of demand clue to the fact that people are not as willing to stop purchasing products or services they need. This means that necessities are inelastic and luxuries are elastic. For example, if the price of food were to rise, people would not stop buying food; if the price of luxury clothing were to rise, it would be easier for people to cut back on such purchases. The definition of the market refers to how vague or narrow a market is defined. For instance, the car market is widely defined and there are no real exact comparisons to cars; this makes them inelastic. However, if the market were to be defined as the electric car market, that is more narrow and there are other kinds of cars that can be purchased. My Summary Total Prot: $CUM End ofGame I {51 10 l 00:00