Substitute Demand: Prices on Coke triple; sales in Pepsi increase rapidly.
Elastic Demand: As prices on toys increase, children are forced to be more inventive with the materials they already own.
Inelastic Demand: Diaper prices shoot through the roof, much to the dismay of helpless young parents.
Many consumers are stressing over the
recent jump in diaper prices. However, since there is no substitute for
diapers, there is nothing young parents can do about this. One woman complains,
"I don't understand why the prices must shoot up. It simply makes things
harder for young parents who are already struggling financially and have no
choice but to buy the product." Other parents are equally as
dismayed. Many are concerned over what this will do to struggling parents, who
may have to give up other less important necessities in order to be able to
afford the diapers. Although less important, these other products increase the
quality of life; without them it is doubtful that the children will have as
good an upbringing. The moral of this story is that companies should think
about the effects their increase in price levels will have on the quality of
human life.
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