Question

Which situation best illustrates the concept of inelastic demand for a

product?
A. A watch company raises its prices after a celebrity is seen
wearing one of its products.
B. A store always sells the same amount of milk each month
regardless of the price.
C. A restaurant begins to see fewer customers each month after
raising its prices
D. A gas station is forced to quickly raise gas prices when oil gets
more expensive

Answer 1

B. A store always sells the same amount of milk each month

regardless of the price.

Step-by-step explanation:

Inelastic demand is a phrase that describes a demand that remains relatively constant despite price changes. Its means that a substantial price change will have little effect on the product's demand. Necessary goods such as foods and medicines and products with no close substitutes tend to have inelastic demand.

Milk is a food item and a necessary good. People will consume it regardless of its price. A small or moderate change in price will have little effect on its demand.