ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Medicine is a necessity, so it has low price elasticity as there will be no change in the demand even when the price changes.

Detailed explanation-2: -When it comes to demand for prescription drugs, numerous studies have found that the price elasticity of demand is less than 1, ranging from-0.18 to-0.60, a situation referred to as “inelastic demand.” This means that the relative change in quantity demanded is always less than the relative change in price.

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: -Inelastic products are usually necessities without acceptable substitutes. The most common goods with inelastic demand are utilities, prescription drugs, and tobacco products. Businesses offering such products maintain greater flexibility with prices because demand remains constant even if prices increase or decrease.

Detailed explanation-5: -Answer and Explanation: The heart medicine will have a more inelastic price elasticity of demand as compared to the newest video game. The reason is that the heart medicine is a necessity and needs to be purchased even if prices increase. Therefore, demand is relatively inelastic.