Discuss inelastic demand and elastic demand, the quantity supplied at each price
Pharmaceutical drugs have an inelastic demand, and computers have an elastic demand. Suppose which technological advance doubles the supply of both products (which is, the quantity supplied at each price is twice illustrate what it was).
1. Illustrate what happens to the equilibrium price and quantity in each market?
2. Which product experiences a larger change in price?
3. Which product experiences a larger change in quantity?
4. Illustrate what happens to total consumer spending on each product?