fb

ACCA SUMMER SALE 20% OFF

Royal Navy seize inelastic items.

Royal Navy seize inelastic items.

A joint operation by the British and Australian navies last month resulted in the largest ever haul of heroin at sea. The drugs weighing 1,032 kilogrammes had an estimated British street value of more than £140 million and were found on a boat 30 miles off the coast of East Africa near Kenya and Tanzania.

This is great news for the authorities but what link does this have with the exams?

HMS Edinburgh creates a perfect turning circle in the ocean as she tests the capability of her engines, going maximum speed and giving a hard left turn. The Type 42 destroyer was on the final leg of her final deployment before decommissioning in 2013. This image was awarded the Best Maritime Image Award in the Royal Navy’s Peregrine Trophy photographic competition in 2013.

Price elasticity of demand (PED) is a core area of pricing theory. PED measures the sensitivity of customer demand to a change in prices and is calculated as

PED  =    % change in demand
% change in price

There is usually an inverse relationship: when price goes up, demand goes down (and vice versa).

Addictive drugs such as the heroin seized by the British and Australian navies however are an inelastic product and in fact are approaching perfect inelasticity. A perfectly inelastic product is a situation where price goes up but the quantity demanded stays the same. In the case of addictive drugs, the drug addicts will still need their “fix” so the quantity demanded by them is largely unaffected by price increases.

Share this entry

Recent articles

View All Articles
From whisky to wickets…
Jun 16, 2025
Title
From whisky to wickets…
Excerpt

Diageo, the global drinks giant behind brands like Guinness, Smirnoff and Johnnie Walker, is reportedly considering a sale […]

“Just Build It” – the Nike LEGO collaboration
Jun 12, 2025
Title
“Just Build It” – the Nike LEGO collaboration
Excerpt

Nike and LEGO are teaming up to launch co-branded products and experiences aimed at inspiring kids through active […]

The road to electric cars is full of potholes…
May 28, 2025
Title
The road to electric cars is full of potholes…
Excerpt

The electric vehicle (EV) market has seen tremendous growth in recent years, with major car manufacturers and startups […]

Is the stage set for airline pricing at the theatre?
May 26, 2025
Title
Is the stage set for airline pricing at the theatre?
Excerpt

Imagine paying £300 for a theatre ticket, only to find there’s more to pay if you want to […]

WeightWatchers files for bankruptcy as drugs take over…
May 12, 2025
Title
WeightWatchers files for bankruptcy as drugs take over…
Excerpt

Weight-loss drugs like Ozempic and Wegovy have revolutionised the weight management market, leaving companies which were once dominant […]

A whole new world: Disney’s Middle East move
May 08, 2025
Title
A whole new world: Disney’s Middle East move
Excerpt

The Walt Disney Company has announced its first-ever theme park in the Middle East, set to be built […]

Big 4 beware: Unity’s got $300M and no audit drama…
Apr 29, 2025
Title
Big 4 beware: Unity’s got $300M and no audit drama…
Excerpt

The former boss of EY and the former chief operating officer of PwC in the UK, are launching […]

Nothing to whine about…
Apr 22, 2025
Title
Nothing to whine about…
Excerpt

The wine industry, steeped in centuries of tradition, is experiencing a shake-up that’s sparking debate among enthusiasts and […]