While we were in class learning about elastic demand, and how a price increase in a product leads to a drop in quantity demanded, I realized that this really applies to my life. I experienced elastic demand when I decided to purchase an I-pod touch and buy I-tunes music for it. Each song I would buy, would always cost $.99. A couple months later, the price of each song on I-tunes increased from $.99 to $1.29. This frustrated me because I did not have the time, nor money to continuously purchase an I-tunes gift cards after only buying a few songs. At that moment, I decided to stop spending my hard-earned money on I-tunes altogether. I thought that the price would eventually lower down again to $.99, but unfortunately it has not yet. So, I'm stuck with the same old music.
Suddenly, an idea hit me: What if I spend money on CD's instead of I-tunes music? The price of CD's has dropped dramatically and I have found my favorite music on a CD with 20 songs for $5.00! Currently, I am investing in CD's as a substitute to my I-pod. In my opinion, I believe that I am saving my money and spending it wisely on music. I have discovered that finding alternatives to elastic demand products, in the end, leads to a wise money-making decision.
I would like to learn more about the necessity of substitutes, due to a dramatic increase in price from an elastic demand product.
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