ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A measure of how consumers react to a change in price
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Demand that is not very sensitive to a change in price
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Demand that is very sensitive to a change in price
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A measure of the way quantity supplied reacts to a change in price
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Detailed explanation-1: -Inelastic demand means that when the price of a good or service goes up, consumers’ buying habits stay about the same, and when the price goes down, consumers’ buying habits also remain unchanged.
Detailed explanation-2: -Elastic demand means consumer demand for a product changes proportionately when the price of the good or service changes. Inelastic demand means that consumer demand for a product does not change proportionately with a fall or rise in its price.
Detailed explanation-3: -If demand is elastic, the quantity demanded is very sensitive to price, e.g. when a 1% rise in price generates a 10% decrease in quantity. If demand is inelastic, the good’s demand is relatively insensitive to price, with quantity changing less than price.
Detailed explanation-4: -Inelastic Demand In other words, the quantity demanded is not very responsive to changes in price. Examples of this are necessities like food and fuel. Consumers will not reduce their food purchases if food prices rise, although there may be shifts in the types of food they purchase.
Detailed explanation-5: -Inelastic demand in economics occurs when the demand for a product doesn’t change as much as the price. A steep demand curve graphically represents inelastic demand. The steeper the curve, the more inelastic the demand for that product or service is.