Economics Tuition Bishan – Demand & Supply/Elasticity of Demand and Supply – Explain whether the demand for tour package is price-elastic or price-inelastic.
•Definition of price-elasticity of demand
•Meaning of price-elastic or price-inelastic demand for tour packages
•Examine the determinants of PED to assess whether demand for tour packages are price-elastic or price-inelastic
1) Identify the determinants of PED
•Assess how it will affect the value of PED
•Discuss it in the context of tour packages
oDegree of necessity of dd
oAvailability of substitutes
oProportion of income spent on the good
oTime period for consideration of purchase
2) Analysis of the significance of determinants of PED
•Time period – search time is longer – PED-elastic
oTour agency organizes more tour exhibitions with fall in price to increase in Qtydd
The understanding of the determinants of PES will reveal the economic profile of the consumers which reflects the consumption behavior and purchasing power and thus will determine when the demand for tour packages is price-elastic or price-inelastic.
This article is contributed by Mr. Simon Ng, founder and principal JC Economics Tutor of Economicsfocus, who has 20 years of teaching experience. Currently, Mr. Simon Ng provides specialized Economics Tuition and GP Tuition. To read more articles on Economics issues and skills development, please refer to the JC Economics Essays blog.