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Price Elasticity Of Demand In Canada

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Microeconomics features two major topics Supply and Demand, which helps study the change in the market conditions of a product. The topic that we have picked is the elasticity of demand, that helps to analysis the effective change of the quantity demand of a product with the effective change in its price. Canada is considered as the sixth largest oil producer in the world, where the oil meets 40% of Canada’s total energy needs through the variety of products. These two articles provide information regarding the change in the quantity demanded of the product due to the change in its price.
Article 1 Per Huffington post Canada, on 1st December 2015, the CEO of Canada mortgage and housing corp., has stated there would be a sharp fall in the housing prices in Canada if the oil prices fall and stay $35 for five years. With the fall in the prices of oil, there would be a drop in …show more content…

The demand for travel by air depends on the price of the ticket and the income of the consumer. Both price and income elasticity are taken into consideration, while the price elasticity measures the effective change in the quantity demand and income elasticity deal with the demand of the product due to its change in the income of a consumer. As per the studies, the overall median price of elasticity is -1.1, indication that the demand for air travel is relatively sensitive to price changes (Elasticity of Demand for Air Travel, 2017). According to this article, traveling by air has become a trend. When the consumer has to conduct a business travel, it would be relatively inelastic than the one who would be traveling for luxury and tourism. The effectiveness in the change of demand for air travel would be much less for business travels than luxury tour travel due to the change in its price. Figure 2: Elasticity Of Demand For Air

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In the article, “Now Hawaii is Only Hours Away:The Airlines Alter Tourism”,Douglas Karsner provides an insightful perspective into the changes in the tourism industry from 1945 to 1970. Karsner argues that the tourism industry was drastically changed due to various societal factors including post war trends like higher incomes and education levels, commercial airline advertising initiatives, and tech/economic developments that made it easier for the middle class to use the airplanes as their preferred method of travel. Essentially, Karsner uses the above arguments to prove that the airline industry(once a luxury travel method accessible only to the upper echelons of the country), became the most popular method of transport over ships and trains

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As prices fall, consumers purchase more quantities and as prices rise, consumers purchase less. A change in quantity supplied happens when the retail price of the good or service changes. DJ Econ was explaining the inverse relationship between price and quantity demanded. According to the Law of Demand, as the own price of a good decreases, the quantity

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In the free market, housing prices are determined by the intersection of demand and supply. Any change in the demand and supply conditions will lead to change the housing prices in the market. During the recession of 2008, the consumer used to buy less of goods and services due to fall in consumer confidence index. Since housing is considered as a major expenditure to the American family, people are inclined to buy fewer homes during the period of economic downturn.

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(Chanis, 2012) Considering the fact that the global petroleum market depends on the worldwide market there would be an imbalance in the price per barrel of oil. On the upside the information from the study concludes by the American Foreign Policy Interests doesn't necessarily correlate with the promises given by Donald Trump in his 2016 speech covered by the New York Times. On the account that America although is improving in converting to more efficient forms of transportation petroleum is still dominant form of propellant. The study does however conclude Donald Trump’s promises of better drilling

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Opinion Essay Answer the following questions in well-organized answers. These questions want your opinion about the Canadian economy, and while there are no right or wrong answers, you will be graded on how thoughtful and clear your answers are. Your task, after answering them, is to take your responses for each of these questions and turn them into an essay; this will involve some planning on your part in order to make these five questions into one cohesive essay. Your essay will be marked using the rubric at the end of this assignment. 1.

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Jim is worried about if he’ll be able to stay in business if the price of gas returned to four dollars per gallon. In order to answer Jim’s questions, we can use the slope of the slope to measure the ratio of change in a variable as a percentage of the original amount of the variable. Then we’re going to investigate the price elasticity of demand. Price elasticity of demand tells us the percentage change in quantity demanded in response to a one percent change in price. This is important to us because this measure is used in economics to show the responsiveness, or

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Elasticity is a measure of a variable’s sensitivity to a change. Dairy use to be described as having a inelastic demand, which means that demand changed very little when the price increased or decreased. It was an example in my microeconomics class as a inelastic demand, but this article showed that that has changed over the years. The price now affects the demand of dairy.

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This graph shown below shows the oils production in 2015-2019 the production oil is reduced and by 2035-2050 the oil produced barrel per year is reduced from 60 billion barrels years to 10 billion barrels be year in

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The difference in inelasticity can be attributed to factors that include transportation options and variety of land use. That means when local regions feature more bus stops bike lanes, or access to Light Rail. The individuals in these regions are more likely to either already use these forms of transportations; therefore they don’t utilize on street parking to begin with. Furthermore, in regions with mixed land use individuals are unlikely to utilize a car to commute. Conversely, communities that feature primarily apartment development will result in elastic development to a price change.

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UNIT 3 DISCUSSION In your own words, describe your experience with price elasticity as a consumer. A few years ago the gas price was around $4.00 per gallon; I still had to fill up the tank in my car because it was a necessity. I needed the car to commute to work.

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Social Growing competition and capacity amongst airlines, lower air fares and more relaxed travel restrictions in many regions have made international travel a viable option for an increasing number of people coming to

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In the case of hotels, suppliers create different consumer segments, we can relate to them as lower-end consumers, and higher-end consumers. Obviously, hotels cannot set the price that higher-end consumers are willing to pay, because all lower-end consumers will not be able to afford the good. Inversely, if hotels set the price that lower-end consumers are willing to pay, higher-end consumers gain huge consumer surplus, thus lowering the profit for the suppliers. In order to take the consumer surplus, hotels keep lower prices for some rooms in order to target lower-end consumers and offer some higher quality rooms (for example presidential suits) to target higher-end consumers. The difference in revenues providing different rooms and the same ones is seen below.

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For instance, with the global financial crisis and later the Eurozone crisis, the number of travellers has significantly reduced due to economic hardships. This has affected the profit levels of the airline as well as slowed down its growth prospects. The airline also faces intense competition from other low cost airlines forcing it to extensively invest in product differentiation to counter the competition. This is an expensive

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