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The elasticity of demand is related to the slope of the demand curve, but is not the same. The steeper the demand curve is the more the consumers "must" have the good. Lifesaving medicine, for example, has a very steep demand curve because producers can raise the price without appreciably decreasing the quantity demanded. Goods like this are inelastic. Goods with many alternates, like potato chips, are elastic. If the price is raised, consumers will purchase alternates instead, like pretzels.

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What is the difference between elasticity and inelasticity of demand?

Inelasticity is a good that you will buy nomatter the price change. Elasticity is when the price of a product increases demand for the product will decrease.


1 Define elasticity of demand Provide an example?

Responsiveness of the demand for a good or service to the increase or decrease in its price. Normally, sales increase with drop in prices and decrease with rise in prices. As a general rule, appliances, cars, confectionary and other non-essentials show elasticity of demand whereas most necessities (food, medicine, basic clothing) show inelasticity of demand (do not sell significantly more or less with changes in price).


How can one determine elasticity on a graph?

To determine elasticity on a graph, you can look at the slope of the curve. If the curve is steep, it indicates inelasticity, while a flatter curve suggests elasticity. Additionally, the price elasticity of demand can be calculated by dividing the percentage change in quantity demanded by the percentage change in price.


Price elasticity of demand for luxury goods will be?

elastic becoz wen price of the commodity changes , it affects the demand for the commodity .. Demand for a product is sensitive to price changes .. With icrease in price , the demand decreases nd with decrease in price , demand increases ..


Why price on y-axis in demand function?

bez when demand function have price on y-axis, its mean that price have the inverse relation to the demand, in other words price lead to demand curve.

Related Questions

What is the difference between elasticity and inelasticity of demand?

Inelasticity is a good that you will buy nomatter the price change. Elasticity is when the price of a product increases demand for the product will decrease.


What factor has the grestest influence on elasticity and inelasticity of supply?

price of the commodity


1 Define elasticity of demand Provide an example?

Responsiveness of the demand for a good or service to the increase or decrease in its price. Normally, sales increase with drop in prices and decrease with rise in prices. As a general rule, appliances, cars, confectionary and other non-essentials show elasticity of demand whereas most necessities (food, medicine, basic clothing) show inelasticity of demand (do not sell significantly more or less with changes in price).


How can one determine elasticity on a graph?

To determine elasticity on a graph, you can look at the slope of the curve. If the curve is steep, it indicates inelasticity, while a flatter curve suggests elasticity. Additionally, the price elasticity of demand can be calculated by dividing the percentage change in quantity demanded by the percentage change in price.


Most mental disorders cannot be treated with medication.?

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Why price an independable variable and demand is dependent variable?

Because demand creates the price, and not the price dictates the demand.


How do the changes of demand affect the price?

Higher demand, the higher the price goes. Remove the demand for something and then the price drops.


Price elasticity of demand for luxury goods will be?

elastic becoz wen price of the commodity changes , it affects the demand for the commodity .. Demand for a product is sensitive to price changes .. With icrease in price , the demand decreases nd with decrease in price , demand increases ..


Why price on y-axis in demand function?

bez when demand function have price on y-axis, its mean that price have the inverse relation to the demand, in other words price lead to demand curve.


Why do the demand curve slope downward?

The demand curve will have a downward slope indicating ________ . A. the expansion of demand with a fall in price B. contraction of demand with a rise in price C. the expansion of demand with a fall in price and contraction of demand with a rise in price D. rise in price causes a rise in supply


What will happen to price if the demand for ethanol increase?

If the demand for ethanol increases the price will also increase.This is based on price elasticity of demand.


When a price of a good increased by 2 percent the quantity demanded decreased by 10 percent What is the price elasticity of demand?

Price elasticity of demand= percentage change in demand/percentage cgange in price 2 = % chnge in demand/10 % change in demand= 2*10 % change in demand= 20%