ECONOMICS
CONSUMERS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Elastic
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Inelastic
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Either A or B
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None of the above
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Detailed explanation-1: -Demand is considered inelastic if demand for a good or service remains unchanged even when the price changes, Elastic goods include luxury items and certain food and beverages as changes in their prices affect demand.
Detailed explanation-2: -An inelastic demand is one in which the change in quantity demanded due to a change in price is small. If the formula creates an absolute value greater than 1, the demand is elastic. In other words, quantity changes faster than price. If the value is less than 1, demand is inelastic.
Detailed explanation-3: -We say that the demand for cars is elastic. On the other hand, if a person requires a life-saving patented medicine, they will need to buy it regardless of the price. Price adjustments will probably have a negligible effect on the demand. Accordingly, we say that the demand for life-saving patented drugs is inelastic.
Detailed explanation-4: -The supply of medical devices is highly elastic (a small change in price leads to a large change in quantity) because the market is highly competitive.