Transatlantic air travel (first class)

Wine

0.15

0.20

0.22

0.35

0.40

0.55

TABLE 5.2 Some Selected Elasticities of Demand

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5.3 • Elasticity and Pricing 121

Goods and Services

Elasticity of Price

Beef

0.59

Transatlantic air travel (business class) 0.62

Kitchen and household appliances

Cable TV (basic rural)

Chicken

Soft drinks

Beer

New vehicle

Rail transit (off-peak)

Computer

Cable TV (basic urban)

Cable TV (premium)

Restaurant meals

0.63

0.69

0.64

0.70

0.80

0.87

1.00

1.44

1.51

1.77

2.27

TABLE 5.2 Some Selected Elasticities of Demand

Note that demand for necessities such as housing and electricity is inelastic, while items that are not

necessities such as restaurant meals are more price-sensitive. If the price of a restaurant meal increases by

10%, the quantity demanded will decrease by 22.7%. A 10% increase in the price of housing will cause only a

slight decrease of 1.2% in the quantity of housing demanded.
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