Why do prices of some goods fluctuate more than others
Why do prices of some goods fluctuate more than othersQ. Why do prices of some goods fluctuate more than others?
A. It is a well known fact, that various prices of goods fluctuate at various levels. The products which fluctuate most in price are often held to be necessities, but what is that makes these changes, and which factors influence them.
Before trying to conclude which goods fluctuate most price- wise and why, it seems sensible to ask which group these products belong. As mentioned necessities are known to be inelastic, but so are a lot of products with no close substitutes like for example motor cars, petrol, tobacco and alcoholic drinks. Now what do these goods have in common, one might ask. Well, for starters they all have a very inelastic demand. In these situations we get the graph as the one below (1.A). From 1.A it is obvious that if quantity by some reason decreases...
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