ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Lack of urgency in demand for a product means that a product is not a basic need. The demand for such products can therefore be postponed in case there is a rise in the prices. Thus, the demand will tend to be elastic.

Detailed explanation-2: -An elastic demand is one in which the change in quantity demanded due to a change in price is large. 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.

Detailed explanation-3: -If the quantity demanded of a product changes greatly in response to changes in its price, it is elastic. That is, the demand point for the product is stretched far from its prior point. If the quantity purchased shows a small change after a change in its price, it is inelastic.

Detailed explanation-4: -Key Takeaways Elastic goods include luxury items and certain food and beverages as changes in their prices affect demand. Inelastic goods may include items such as tobacco and prescription drugs as demand often remains constant despite price changes.