Explain how the economic concept of elasticity of demand applies to disposable grocery bags and how the concept might have been used in setting the 10-cent bag fee

Explain how the economic concept of elasticity of demand applies to disposable grocery bags and how the concept might have been used in setting the 10-cent bag fee

Recently, the State of California prohibited grocery stores from providing free disposable bags to their customers. Instead, stores were required to charge a small fee of 10 cents per bag if customers wanted to buy bags from the store. Customers were encouraged to bring and use their own reusable bags. Despite the nominal charge of 10 cents per bag being so little, the large majority of consumers have adapted by bringing their own reusable bags when they go grocery shopping.

In a 2- to 3-page paper, explain how the economic concept of elasticity of demand applies to disposable grocery bags and how the concept might have been used in setting the 10-cent bag fee. Besides elasticity of demand, what other economic and noneconomic forces might have been at work in the significant reduction in the use of disposable bags in California?

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