Demand Finale

Elastic/Inelastic Demand 

     An example of elastic demand in my life occurs most frequently in the grocery store for me. For instance, my mother drinks a lot of soda but we can only buy so much at a time because the cost for one 20 pack of sprite costs about $6.99. When it's at this price we only buy one at a time because we wouldn't be able to buy much of any other food. However, when sprite is at a price of $4.99 we will buy two packs because my mother is willing to pay because it's cheaper than two at a higher price. I always hope that the sprite is on sale because when my mother doesn't get to drink sprite in the morning she easier to set off, so I look out for the price of sprite in the store every time I go. 

     Inelastic demand also occurs in my life by way of the grocery store. In my family of five we drink a lot of milk, at least 3 gallons a week (sometimes more, for sure more during the summer when we eat a lot of PB&J's). The price of the type of milk we drink  right now is about $2.29, which is a product we must have available everyday because we eat cereal with milk for breakfast every morning, sometimes with dinner when we have PB&J's, and with our lunch of PB&J's on the weekends. I know that with as much milk as we drink (I believe though that I'm probably the one who drinks it the most because I eat PB&J's all the time) that we will buy it up to a price of at least $4, my parents may even buy it if it went up to $5. Milk is important to my family that if its price went up to $5 we would have to give up other food stuffs we buy, like buying less meat (beef and chicken) so we would be able to afford the milk. (I wouldn't like this very much because I would have to drink less milk with my meals so my whole family could drink equal amounts of milk, while budgeting how much we spend on it).

     What we've studied in class about elastic and inelastic demand has shown me that the market for elastic products is strongly influenced by the price, which in my life the prices of elastic products heavily influences whether I'll buy it. Also, for inelastic products the prices don't affect the quantity that will be demanded, in my life it is the same because if milk price went up we would still buy it; however, we would probably give up an elastic product all together.

Question: I would like to know if elastic demand products give great profits to companies? (Can they manipulate how much profit they'll make by changing the product's price and make a better profit than if the product was at market price?). I would also like to know how companies that produce inelastic products do in the market profit wise, do they make more profit than a company that makes elastic products? Do they have the ability to make more money than an elastic product producing company or will they make less of a profit?