Explanation: China and glassware are most likely to be the most price elastic.
Substitutes: Price elasticity of demand is fundamentally about substitutes. If it's easy to find a substitute product when the price of a product increases, the demand will be more elastic.
Examples of price elastic demandHeinz soup. These days there are many alternatives to Heinz soup. ... Shell petrol. We say that petrol is overall inelastic. ... Tesco bread. Tesco bread will be highly price elastic because there are many better alternatives. ... Daily Express. ... Kit Kat chocolate bar. ... Porsche sports car.May 4, 2019
Music downloads likely to have most price elastic demand.
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.
The four factors that affect price elasticity of demand are (1) availability of substitutes, (2) if the good is a luxury or a necessity, (3) the proportion of income spent on the good, and (4) how much time has elapsed since the time the price changed.
An example of products with an elastic demand is consumer durables. These are items that are purchased infrequently, like a washing machine or an automobile, and can be postponed if price rises. For example, automobile rebates have been very successful in increasing automobile sales by reducing price.
The price elasticity of demand is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price. The price elasticity of supply is the percentage change in quantity supplied divided by the percentage change in price.