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What is the PED of copper? watch

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    My teacher has been saying that it's elastic, but I saw something online that says it's inelastic so now I'm confused...
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    (Original post by student11198)
    My teacher has been saying that it's elastic, but I saw something online that says it's inelastic so now I'm confused...
    Hey!

    So the reality is that your teacher doesn't know whether it's elastic or inelastic, nor does the internet.

    Elasticities change all the time, and economists have to process thousands of bits of data to work out whether a good is elastic or not... it's a really hard question to answer (I won't go into depth here because it's not important for your exam).

    For your exam, you only need to argue why it might be elastic or why it might be inelastic.

    So it might be inelastic because:

    • copper is necessary in many production processes such as the production of wiring, copper coins - so if the price of copper changes, producers will still need it, and so quantity demanded won't change much, suggesting inelastic demand

    It might, however, be elastic because:

    • there are many industries where copper is not necessary such as building work. Here copper could in fact be replaced with many substititues (steel and iron, for example), so if the price of copper rises consumers, businesses using copper may switch over to these other metals, suggesting responsive elastic demand

    Point here is that copper could be elastic or inelastic; you can argue either way. In the exam that's what they want you to do! That's the point of evaluation.

    Without data you cannot say for certain. So unless your teacher access to copper prices and quantities... she can't go around saying it's elastic or inelastic - I think she meant that copper could be elastic, or perhaps she had looked a particular bit of data and concluded that it's elastic.
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    Commodities usually considered price inelastic in demand which can explain why prices are volatile and to justify why a rise in prices could lead to a rise in export earnings. I assume it is related to OCR F585? You wouldn't need to argue whether is elastic or inelastic on PED but just to assume is inelastic. If it was an AS question you usually need to use the data provided to assess whether or not is elastic or inelastic (substitutes available, % of income spent, any reference to price or revenue?).
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    You can only really judge whether something is price elastic or inelastic through data, especially for raw materials/commodities like copper. It might be easier for a fast-food chain like McDonald's. One would argue their products are fairly price inelastic.
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    (Original post by SubZero~)
    You can only really judge whether something is price elastic or inelastic through data, especially for raw materials/commodities like copper. It might be easier for a fast-food chain like McDonald's. One would argue their products are fairly price inelastic.
    Fast food is price INELASTIC? But how many substitutes are there? Really whether something is elastic or not depends on the avaible substitutes. Maybe you mean in principle it might be easier to collect the data necessary to calculate McDonald's price elasticity of demand.
 
 
 
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