Question

Which of the following is an example of a good for which the demand is likely to

become more elastic over time if the price changes dramatically?
A.) gourmet food
....
B.) prescription medicine
...................
C.) shoe polish
...........
D.) gasoline
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Answer 1

The answer would be gasoline. This is because so many people have cars.

Answer 2

The correct answer is D) gasoline.

Gasoline is an example of a good for which the demand is likely to become more elastic over time if the price changes dramatically.

When the demand for a product is very sensitive to change in price it is called elastic. If the demand elasticity is equal to one is called unitary elastic. And when the demand is not very sensitive to change in price it is called inelastic. In this case, gasoline is an example of a good for which the demand is likely to become more elastic over time if the price changes dramatically. If the price is high, the demand for gasoline is going to be less. People would not like to buy more gasoline because gasoline costs more.