Salt has no close substitute and moreover a household has to share a negligible part of his
entire budget. Therefore, even in spite of increase in price of salt its demand will not be
affected. However, demand for a particular brand of toothpaste is comparatively more
elastic as there are many brands of toothpaste available in the market, so the consumers
can switch over to any other brand in case of hike in the price of a particular brand of
toothpaste.
Answer the following questions based on the above given case: (4)
i.
Which factors according to above passage are responsible for price elasticity of
demand?
ii.
Is the demand for luxury item elastic? Why?
iii.
Name some commodities which have small number of substitutes?
iv.
What do you think about the price elasticity of demand for a particular brand of
match box? Is it elastic or inelastic? Explain.
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Answer:
your answer is iii
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