week 2_ Economics_ discussion

Lily Wrote:

If the demand of illegal drugs is inelastic, the increased arrests of illegal-drug sellers will reduce the quantity of drugs available. The limited quantity of drugs and increase in price will increase total expenditures. Since drugs are addictive, I believe that this statement is correct. Regardless of what the quantity is, the demand will always be there. So, it is true that illegal drugs are inelastic in demand and the expenditure will depend on the increase or decrease in the price itself.

Early suppliers of more fuel-efficient cars were able to charge premium prices for them because they had inelastic demand at the time. They had perfectly inelastic demands, their prices were dependent on them because there was no competition. It was a niche market that was only owned by them. When others suppliers adopted similar technologies, the fuel-efficient cars became more elastic. Other companies were able to supply the same thing for competitive prices. Customers are able to be offered several different options for suppliers that adopted similar technologies. 

Ronny Wrote:

Our readings teach us about both microeconomics and macroeconomics. There is an ever changing ebb and flow for supply and demand. Needing something no matter the cost, such as drugs defines inelastic demand. Therefore, if a persons addiction fuels them to continuously take drugs, they will continue to do so with or without the financial means. Most turn to theft and other crimes to fund their addiction. When the Drug Enforcement Agency or local Police agencies increase arrest on drug dealers, demand is not changed. Demand is so great for illegal drugs that when arrests are increased there are enough dealers to keep the supply moving and enough buyers seeking to fuel their addiction.

Early adopters of fuel economic vehicles or even electric vehicles such as Tesla brought new technology to the elite. I can compare this scenario to many new technology releases such iPhones. Folks that could afford such luxuries know that it is only a matter of time that either the company will make another release of the new edition or a competitor will come up with a greater and cheaper version. Eventually other competitors will refine the method of production that will reduce the price of the product.