NOTE: price elasticities of demand and supply are important for understanding the response of consumers and producers to changing demand and supply conditions.This means that regardless of the price the producer charges on such products or services, the consumer must get this product or service at the same quantities.

ACTUAL DISCUSSION:

Directions

Please discuss all of the following questions in your initial submission.

1. Can there be such a case that producers can charge whatever price they want without any limit? Explain your answer. Try to find some examples.
2. Even if consumers do not react to higher prices in the short run, is there a chance that they may react in the longer run? Explain your answer. Try to find some examples.