Question

4. The demand for salt is relatively price inelastic, while the demand for pretzels is relatively price elastic. How can you best explain why?

Answer 1

The demand for salt is relatively price inelastic, while the demand for pretzels is relatively price elastic because :

•Price of the salt changes but not it's demand and it's an easily available for a small budget. So demand for common salt remains the same.

•There are good substitutes for salt such as pepper but very few substitutes for salt.

•But in case of pretzel salt,when the price is increased ,demand becomes less.