Prices are the driving force behind every buying and selling decision in a market economy. Prices are determined by the supply and demand equilibrium and are influenced by the price elasticity of demand and supply of goods and services.

• Based on the outcome of the simulation, was the sale price you set the same as the equilibrium price? Refer to the supply and demand model to explain why they might be different.
• Imagine that you own your own business. How would price elasticity of demand impact the pricing decisions of your business?
• What are the determinants of price elasticity of demand? Identify at least three examples.