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Price elasticity of demand is a consumer's receptiveness to the change of a price in a good or service. In essence what this means is that a consumer has certain expectations in regards to goods or services he or she wishes to purchase. There are certain goods or services that a consumer will purchase regardless how much they are. This usually occurs when the item is a necessity and an alternative is not available. This is price elasticity. The opposite end of the spectrum is price inelasticity. If the item is not a necessity, per say it is a luxury item or the item can be replaced or…
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