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.

My SAMPLE: discussion of tuition rates, a university official argues that the demand for admission is completely price inelastic. As evidence, she notes that while the university has doubled its tuition (in real terms) over the past 15 years, neither the number nor quality of students applying has decreased.

1. In addition to inelastic demand, what else may explain increasing demand despite increasing prices? Suggest three possible reasons. Explain your answer and give examples.
2. The coronavirus crisis has started to affect the U.S. economy in March 2020. We are in Fall of 2021 now. During this period, do you think the price elasticity of demand for education has become larger or more inelastic with the coronavirus crisis? Why?