In yourresponses, comment on at least two posts from your peers and share an example of a company that experienced a change in revenue as the result of a change in the price of the good or service they provided. After reading your peers' posts, explain which determinants of price elasticity of demand could be the cause of the change in demand.

I think I understood this game a little better than the last one. Based on my simulation results, the equilibrium price is not the same as my set price.

The price elasticity is important when making business decisions because you have to pay attention to the price change. When prices change, the quantity demanded also changes. It is important to know when the price changes so the business owner can change the quantity of the supplies demanded.

One of the three determinants is Availability of close substitutes. This determinant has more elastic demand. This makes it easier for consumers to switch from that good to a different good that is close to it. The next determinant is Necessities versus Luxuries. Necessities have inelastic demands and luxuries have elastic demands. Necessities like needing to go to the doctor's office. If the price of a doctors visit increases, it does not mean the amount of visits change. Luxuries like a boat. When the price increases for a boat, the quantity of boats demanded decreases. Lastly, Definition of the Market. The elasticity of demand depends on the boundaries of the market. Narrowly defined markets have more elastic demand than broadly defined markets because it is easier to find close substitute for narrowly defined goods.