What is meant by elasticity of demand and inelasticity of demand?

Price. Can anyone give me some examples to aid in the understanding?
how about the definition of it?

6 years ago - 2 answers

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inelasticity demand would include water and air. Not that we necessarily "buy" it on the open market, - but we need what we need.

elasticity would include DVD / movies. Dropping prices (or raising prices) by 1/3 may cause sales to increase / decrease by 100%

Just a guess, if increasing gasoline prices by 10% does NOT reduce demand by the 10%, then that's IN-elastic.

6 years ago

Other Answers

Elastic demand: The generic groceries at the store. If price goes up a little, everyone will just switch to the generic brand at another store. (People buy less if price goes up)

Inelastic demand: Oil. Everyone thinks they gotta have it, any price. (People keep buying, even when price goes way up)


by Jerry Lee - 6 years ago