Think of three goods or services that you buy frequently. Fill in the following details for each goods or service in the tabular template provided:
1. The current price and the quantity that you normally buy.
2. A higher price than the current price and the quantity that you will buy at that price.
3. A lower price than the current price and the quantity that you will buy at that price.
Gallon of milk
Price $2.69 Quantity bought (1)
$3.59 Quantity bought (0)
$1.79 Quantity bought (2)
BODY ARMOR Drink
Price $2.00 Quantity bought (2)
$3.00 Quantity bought (1)
$0.97 Quantity bought (10)
Lettuce Head
Price $0.99 Quantity bought (1)
$2.00 Quantity bought (0)
$0.50 Quantity bought (6)
Now, consider the price, and the quantity that you are willing to purchase at that price and answer the following questions.
1. How does price influence the quantity of an item you are willing or able to purchase?
2. Does it make a difference if the item is an essential item, like food vs. a luxury item like a sports car whether you are likely to continue to purchase the item even if the price goes up?
3. Consider what you can infer from your own purchasing habits about price and demand? Explain your answer.
