After I reviewed the research conducted by the United States Potato Board, I was surprised by the results. However, after review of the research, I agree with the Board that potatoes can be fairly inelastic. The consumption of potatoes in the United States is very high and substitutes for potatoes may be easy to find, but substitutes like instant potatoes are not good.
Since many consumers of potatoes think they pay more for potatoes than they actually pay, the increase in price of potatoes would not significantly decrease the demand for potatoes to a certain point. According to the research, prices could increase by a significant amount with little decline in demand. Yet, I am not sure if I agree with the article on significant changes in price. Although potatoes may be fairly inelastic with small increases in potato prices, I also believe that if the price is increased significantly that demand will become very elastic. I can also see how significant price changes in potatoes would not decrease demand since most consumers are willing to pay more for potatoes without a decrease in demand. Are potatoes really as inelastic as the article claims? I think that the article is very convincing, but I am not completely convinced.