Elasticity

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Question 2
Easy

Case Study: The Growth of Bespoke Virtual Reality (VR) Wellness Subscriptions

In the post-digital workspace, the market for corporate-sponsored Bespoke Virtual Reality (VR) wellness subscriptions has surged. Companies provide employees with high-end immersive VR software and interactive wellness coaching. Economic studies reveal that the cross-price elasticity of demand between these premium VR packages and standard online video-conferencing services is +0.45.

Additionally, the income elasticity of demand (YED) for these premium VR wellness subscriptions is calculated to be +2.4. This reflects their nature as a high-end discretionary perk favored during economic expansions.


Using the income elasticity of demand value from the text, explain how a fall in consumer incomes will affect the demand for bespoke VR wellness subscriptions.

[2]

Elasticity Questions

  1. A Level
  2. /Economics
  3. /Elasticity