[QUOTE=LexLuther]In economics, we don't characterize businesses as elastic or inelastic. We speak of elasticity with regard to the demand and/or supply curve. What is being postulated in recent postings here is that the demand curve for the services that AMPs provide is highly elastic. If the demand curve for AMP services were truly elastic, it would mean that a relatively small increase in the cost of those services would result in a relatively large decrease in the quantity of those services demanded.
However we need to keep in mind that there are normally three factors which influence price elasticity of demand for a particular good or service.
The first and perhaps most influential factor which influences demand price elasticity is the availability of substitutes. The classic example given to explain this is that if the price of coffee were to go up, people could switch to tea. So in this instance the demand curve for coffee would be characterized as elastic. However with AMP services, there are few if any substitutes for what is available at an AMP, unless you are the kind of guy who likes SW's or escorts, which I maintain is not the case for most AMP afficianados.
The second factor which is important in determining the elasticity of demand for a good or service is the amount of income available to spend on it. This must be considered in relation to the increase in the cost of that good or service. I maintain that for the average AMP-goer, an increase of say $20 or even $40 per visit is a negligible increase and will likely not cause consumers to reduce their demand for this service.
The third factor in determining demand elasticity is time. For example, if the price of petroleum products were to rise, in the long run, people could moderate their demand for the product by buying more fuel-efficient cars, driving less, car-pooling, etc. But they could not do this overnight. I maintain that with respect to the AMP industry, time does not serve to make the demand curve elastic.
QED, the demand curve for AMP services is not highly elastic.
LexLuther[/QUOTE]
Very good explanation and I bow to your Economic ferver. However, my alternative to the 2nd factor is porn... It's cheaper, more varietal and I can choose my style!
But, I will say that your explanation trumps mine!
Van