ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -So, if the price of a good increases by 10 percent and the quantity demanded decreases by only 5 percent, that good is said to have inelastic demand.

Detailed explanation-3: -An inelastic demand is one in which the change in quantity demanded due to a change in price is small.

Detailed explanation-4: -Examples of goods with inelastic demand include gasoline, necessary foods, and prescription drugs. When price changes on these items, demand doesn’t fluctuate much because these items are required in the everyday lives of most consumers.