GENERAL KNOWLEDGE

Detailed explanation-1: -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-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: -Elastic Demand Note that a change in price results in a large change in quantity demanded. An example of products with an elastic demand is consumer durables. These are items that are purchased infrequently, like a washing machine or an automobile, and can be postponed if price rises.

Detailed explanation-4: -Elasticity occurs when demand responds to changes in price or other factors. Inelasticity of demand means that demand remains constant even with changes in economic factors.

Detailed explanation-5: -If a product is price elastic, a small change in price will result in a large change in the demand for that product. On the other hand, if a product is price inelastic, changes in price will have little effect on the demand for that product.