ECONOMICS
ELASTICITY OF DEMAND
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Detailed explanation-1: -The demand for a good is inelastic if the percentage decrease in the quantity demanded is less than the percentage increase in its price. In this example, a 10 percent price rise brings a 2 percent decrease in the quantity demanded, so demand is inelastic.
Detailed explanation-2: -The authors estimated a price elasticity of 0.479-a 1 percent increase in the beef price results in a decrease in per capita beef consumption of 0.479 percent.
Detailed explanation-3: -The cross elasticity of demand for substitute goods is always positive because the demand for one good increases when the price for the substitute good increases. Alternatively, the cross elasticity of demand for complementary goods is negative.
Detailed explanation-4: -If the percent change in quantity demanded is less than the percent change in price, economists label the demand for the good as inelastic. 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.