What is the relevance of the concept of price elasticity to consumer
- It helps in determining incidence of tax. For goods whose demand is elastic, the burden is borne by the producer and for those whose demand is inelastic; the burden is borne by the consumer.
- It is used to determine the expenditure of the consumers. Consumers spend more on commodities whose demand is inelastic such as soap and spend lend less on commodities whose demand is elastic
- Protection and subsidization. The government has a duty to protect its citizens from over exploitation by giving subsidies to essential commodities such as drugs and maintenance of roads.
CATEGORIES Economics
TAGS Dr. Bbosa Science
