When prices or incomes change, consumers respond by changing their purchasing habits. Define the concepts of demand elasticity, income elasticity, and cross-price elasticity. Then, discuss a change in price that has occurred for a good or service that you consume. Consider how the change in price of that good or service changed your purchasing habits for that good or service, but also how it changed your purchasing habits for complementary or substitute goods or services. Explain which type of elasticity is involved in your specific example.

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Demand elasticity measures the responsiveness of the quantity demanded of a good or service to a cha... View the full answer