Watch any adverstisement on media illustrating the inelastic demand for milk and elastic demand for soda. Based on the cartoons, make a GUESS below on what the difference is between elastic and inelastic demand. Do not worry if your guess is incorrect.
Question
Watch any adverstisement on media illustrating the inelastic demand for milk and elastic demand for soda. Based on the cartoons, make a GUESS below on what the difference is between elastic and inelastic demand. Do not worry if your guess is incorrect.
Solution
Elastic demand refers to a situation where a small change in price leads to a significant change in the quantity demanded. For example, if the price of soda increases slightly, people might drastically reduce their consumption because there are many other substitute drinks available.
On the other hand, inelastic demand refers to a situation where a change in price does not significantly affect the quantity demanded. For instance, even if the price of milk increases, people will still buy it because it is a basic necessity and there are no close substitutes.
So, the main difference between elastic and inelastic demand lies in how much the quantity demanded changes in response to a change in price.
Similar Questions
Demand is inelastic ifMultiple Choicethe quantity demanded changes more or less proportionately with the price.the quantity demanded does not change very much even if the price changes dramatically.the demand curve is bowed inward towards the origin.the demand curve is bowed outward away from the origin.
Explain significance of elasticity of demand.
An inelastic demand means thata.the change in quantity demanded is equal to the change in price.b.consumers respond directly to a change in income.c.consumers hardly respond to a change in price.d.consumers respond substantially to a change in price.
Which situation best illustrates the concept of elastic demand for a product?A.A restaurant begins to see fewer customers each month after raising its prices.B.A watch company raises its prices after a celebrity is seen wearing one of its products.C.A store always sells the same amount of milk each month regardless of the price.D.A gas station is forced to quickly raise gas prices when oil gets more expensive.
elasticity of demand and its types in details
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.