Distinguish between perfectly elastic demand and perfectly inelastic demand.
Answers
Elasticity measures how the demand of a product/good reacts to changes in the price of a good/product.
Goods/products with few substitutes and are considered highly necessary or part of society's daily needs follows inelastic demand.
For example, even when gasoline increases price, the demand of gasoline will not be greatly affected as there is currently very few substitutes to gasoline and gasoline is highly important in a society to fuel cars.
Goods/products with numerous substitutes and/or not a part of society's daily needs follows inelastic demand.
For example, when Coke increases in price, the demand of Coke is greatly affected (decreased). This is because consumers may buy other carbonated drinks which are relatively cheaper.
we can define a perfectly elastic demand as a demand where any price increase would cause the quantity demanded to fall to zero, and reducing the price of a good or service will not increase sales. If the quantity demanded changes a lot when prices change a little, a product is said to be elastic. ... The most famous example of relatively inelastic demand is that for gasoline. As the price of gasoline increases, the quantity demanded doesn't decrease all that much.
on the other hand Perfectly inelastic demand means that a consumer will buy a good or service regardless of the movement of price. In order for perfectly inelastic demand to exist, there can be no substitutes available. An example would be food for a starving man. Another example would be insulin to a diabetic.