Topic 5: Ripple Effects and Elasticity

         Ripple effect is when a single subject change the price, it influences many other products that are related to it’s which create a difficult pattern to predict. For example if the price of corn increases, the price of animals who eat corn increase. If the price of oil increases then most of products or things’ cost increase. For example crayon, fish, food and other thing. Anything that includes transportation in the process will raise their cost because oil’s price increases. The rise of cost of oil will affect individual as well. It will affect our family too because most of the thing we use include transportation in the process that mean the cost of everything we use rise. Also every time when my parents drive me to somewhere, the price of driving me to a certain place increase as well. Like what I said before, corn is another ripple effect because when the cost of corn increase. Any animals that eat corns will increase their price because they need more money to let them be full.

        The idea of elasticity effect can influence the market because if an object is very elastic, the quantity will increase in a great amount even if the price only changes a little bit. However, if the object is inelastic, the quantity will not change a lot even though the price changes a lot. I want the new iPhone and it is elastic because people are deciding between if they shall get an iPhone or other types of smart phone. This mean that if the iPhone price decrease a great amount of people will have a great incentive to buy iPhone instead of other types of smart phone.