make a list of products for which you think demand is price inelastic and price elastic. specify the reasons you may think relevant for your analysis
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Price elasticity is the rate of flexibility of the demand of the good with respect of the change in the price of the good. If the demand of the goods does not change with the rate of change in price then the good is inelastic. If the demand of the goods does change with the rate of change in price, then the good is elastic.
Products that are elastic or inelastic are the following;
Elastic:
(i) Television.
(ii) Playstation.
(iii) Mobile phone.
Inelastic:
(i) Wheat.
(ii) Water.
(iii) Clothes.
The reason behind this is that elastic goods are the wishes of the people while the inelastic goods are the necessities of the people.
Products that are elastic or inelastic are the following;
Elastic:
(i) Television.
(ii) Playstation.
(iii) Mobile phone.
Inelastic:
(i) Wheat.
(ii) Water.
(iii) Clothes.
The reason behind this is that elastic goods are the wishes of the people while the inelastic goods are the necessities of the people.
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Answer:
ADVERTISEMENTS: If the price of tea rises, consumers may curtail the consumption of tea and purchase coffee and versa. In such a case the demand for tea decreases, while demand for coffee increases. Therefore, the elasticity of demand for both of these goods would be higher.
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