Elastic vs inelastic examples

Elastic Demand and Inelastic Demand refer to how sensitive the quantity demanded of a good or service is to changes in its price. When demand for a product is elastic, it means that changes in price result in relatively larger or equal changes in quantity demanded.

However, when demand for a product is inelastic, it means that changes in price result in relatively smaller or no changes in quantity demanded.

What is Elastic Demand?

Elastic Demand is when price changes result in relatively larger changes in quantity demanded.

In other words, consumers are very responsive to price changes.

Inelastic demand example

If the price of an elastic product increases, consumers tend to decrease their quantity demanded significantly, and if the price decreases, they tend to increase their quantity demanded significantly.

For example, luxury items, non-essential goods, and products with close substitutes have elastic demand.

Features of Elastic Demand:

• Price Sensitivity: In elastic demand, consumers are highly sensitive to changes in price.

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