State with reasons whether the following items will have elastic or inelastic demand:
coke, matchbox, medicines, electricity, cigarettes, butter for a poor person and NCERT
books.
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Elastic demand refers to a situation whereby a slight change in price will lead to a drastic change in the quantity demanded.
Elasticity of demand is more than 1.
Is usually a characteristic of goods considered luxuries:coke,cigarettes,butter for the poor
Inelastic demand refers to a situation whereby a change in the price of a product leads to little or no change in the quantity demanded.
Price elasticity is less than 1.
Products in this category are considered a necessity:matchbox,medicine,electricity,NCERT books
Elasticity of demand is more than 1.
Is usually a characteristic of goods considered luxuries:coke,cigarettes,butter for the poor
Inelastic demand refers to a situation whereby a change in the price of a product leads to little or no change in the quantity demanded.
Price elasticity is less than 1.
Products in this category are considered a necessity:matchbox,medicine,electricity,NCERT books
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