This week has been about elastic products and inelastic products. To be an elastic product, the change in price has to result in a relatively large change in quantity demanded. As for inelastic products, the change in price has to result in a relatively small change in quantity demanded. It disturbs me a bit how the economy can manipulate the prices of an inelastic product, and no matter the price, it is still a valuable necessity and the community is influenced to buy it. But I suppose that's how the economy gains its money.
It is not surprising that you find it disturbing how people manipulate elasticity, but in reality it makes sense because people are looking to make more money. It is just a fact in the economy and that is what is guiding the decision of businesses. When a product is inelastic, the business is going to see that as a major advantage to the product. It encourages them to keep producing it so that they can make more money. The economy does naturally regulate this though because they cannot make the prices so exorbitant or else nobody would be able to buy it.
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