ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The demand for necessities or necessary goods is inelastic because whatever may be the changes in the price of these goods, their demand does not change drastically. For example demand for milk, salt, etc.

Detailed explanation-2: -You may have learned in your high-school or college economics class that dairy consumption is relatively “inelastic, ” meaning that demand for food staples like milk, butter and cheese varies little with price.

Detailed explanation-3: -The demand for necessities is inelastic. By inelastic demand we mean that as the price of the commodity changes the quantity demand does not change. The consumer will not buy lesser of the commodity of the price increases.

Detailed explanation-4: -Electricity is inelastic because it does not have any close substitutes. For examples, petrol and salt. Firms with monopoly power will face an inelastic demand curve.

Detailed explanation-5: -Producers cannot stock up on fresh milk by a large quantity as it will go off, which makes the supply of fresh milk inelastic.