For each of the following pairs of goods, which good would you expect to have more elastic demand and why? a. required textbooks or mystery novels b. Adele recordings or pop music recordings in general c. subway rides during the next six months or subway rides during the next five years d. root beer or water

Understanding elastic demand is crucial when analyzing how sensitive the quantity demanded is to a change in price. If a product has elastic demand, consumers will significantly reduce their quantity purchased in response to price increases. This is often because there are plenty of other options they can turn to, known as substitutes.

For instance, mystery novels exhibit elastic demand. Why? Because if the price of one mystery novel goes up, a reader can simply choose to buy a different author's book or another genre altogether. The availability of substitutes makes it easier for consumers to make such a switch. Another influence of elastic demand is that the good is usually not essential to daily life; it is more of a luxury or non-essential item.

In contrast, inelastic demand describes a situation where the quantity demanded changes very little when the price changes. Even with a price increase, consumers still buy the product almost to the same extent as before. This usually happens when the good is a necessity or when there are few or no substitutes available.

Take water for example. Water has inelastic demand because it is essential for life, and there are no substitutes. You can't decide to stop drinking water or replace it with another liquid without compromising health. Similarly, people need specific textbooks for their courses, and there aren't suitable substitutes that can fulfill the exact educational requirements, leading to inelastic demand for these textbooks.

The availability of substitutes is directly related to demand elasticity. When there are many alternative products or services that can replace the original one, the demand for that original product is likely to be more elastic.

For example, Adele's recordings, while highly valued by her fans, compete with a myriad of other artists and music types. If Adele's music became too expensive, fans might switch to other similar artists. The substitutes availability for her music is high, making the demand for her recordings elastic. A good with many substitutes is like a player in a large team – if one is removed, there are plenty others to take its place.

The necessity of goods greatly impacts how much the quantity demanded will change with a price change. Essential goods – products and services that are considered necessities – generally have inelastic demand because consumers will continue to buy these regardless of price changes.

Subway rides are a good case in point. Many city dwellers rely on the subway for daily transport regardless of short-term cost changes; they simply need to get to work or school. This need makes their demand inelastic in the short term. However, over a longer period like five years, there may be changes like relocation or telecommuting options that can make demand more elastic as the necessity changes and alternative modes of transport or living arrangements come into play.