Question

1. Name a product/service that you purchase, and the demand is inelastic. Explain.

2. Name a product/service that you purchase, and the demand is elastic. Explain.

Answer 1

Step-by-step explanation:

1. Inelasyic Demand i.e Change in price has no effect on demand

basic necessity goods such as: food, cloths, shelter etc are inelastic in demand because change in price will not affect the consumer behavior. due to decrease in price consumers will not start eating too much and vice versa.

2. Elastic Demand i.e change in price has significant effect on demand

These are the luxurious goods such as Apple iPhone, porchy car etc change in price will significantly affect the consumer demand decrease in price will induce the consumers to buy more and increase in price will reduce the consumer demand.