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Essential goods, such as food and medicine, sometimes have perfectly inelastic demand. Gas could be another example of perfectly inelastic demand since many consumers rely on gas-powered vehicles to commute. Example: A town has only one gas station that sells gas for $2.00 per gallon.
These are:
The most common goods with inelastic demand are utilities, prescription drugs, and tobacco products. In general, necessities and medical treatments tend to be inelastic, while luxury goods tend to be the most elastic. Another typical example is salt.
Which of the following characteristics would describe a product with an inelastic demand? The good is considered a necessity and few substitutes for the product exist.
Inelastic demand is when a buyer's demand for a product does not change as much as its change in price. When price increases by 20% and demand decreases by only 1%, demand is said to be inelastic.
The demand for gasoline from any single gas station, or chain of gas stations, is highly elastic. Buyers can choose between comparable products based on price.
not elasticDefinition of inelastic : not elastic: such as. a : inflexible, unyielding. b : slow to react or respond to changing conditions.
Inelastic means that a 1 percent change in the price of a good or service has less than a 1 percent change in the quantity demanded or supplied.
Inelastic Demand vs. Elastic DemandInelastic DemandElastic DemandLow changes in demand with price changes.High changes in demand with price changes.Real-life examples include utilities, prescription drugs, or gas.Real-life examples include luxury items or non-essential items.
Definition – Demand is price inelastic when a change in price causes a smaller percentage change in demand. It occurs where there is a price elasticity of demand (PED) of less than one. Goods which are price inelastic tend to have few substitutes and are considered necessities by users.
Supply whose percentage change is less than a percentage change in price. For example, if the price of a commodity drops twenty-five percent and supply decreases by only two percent, supply is said to be inelastic.
Option d, air conditioners is the correct answer. It will have elastic demand. Elastic demand is the demand which will change significantly with a small change in price.
A commodity with more substitutes has more elastic demand, since the prices of substitutes will affect the elasticity of demand and the substitution effect will be strong.