Why soda is a elastic product?

Answer 1

A good or service is considered to be highly elastic if a slight change in price leads to a sharp change in the quantity demanded or supplied. Usually these kinds of products are readily available in the market and a person may not necessarily need them in his or her daily life. On the other hand, an inelastic good or service is one in which changes in price witness only modest changes in the quantity demanded or supplied, if any at all. These goods tend to be things that are more of a necessity to the consumer in his or her daily life.

The aforementioned definitions are from wikipedia. However, I am taking economics in school right now and your question is actually tricky. It all depends on whether you think of soda as a "necessity". The price of coke could go up a little, but I really do not think that a slight price change would cause people to stop buying as much Coke as they do already, since alot of people are addicted to the caffeine. So, saying that, I really don't believe that soda is an elastic product. I think it is an inelastic product simply because to the people that "need their caffeine", soda is a necessity. However, if you were to use Oranges as an example instead, oranges are considered an elastic goog. This is because if the price of oranges were to go up to ten dollars a pound, people wouldn't buy them at that price because they are not a necessity. They might buy a substitute good instead, such as tangerines.

Answer 2

Soda is considered an elastic product because consumers tend to be sensitive to changes in its price. This means that if the price of soda increases, consumers are likely to reduce their quantity demanded significantly as they have other beverage alternatives to choose from. On the other hand, if the price of soda decreases, consumers are likely to increase their consumption, leading to a more than proportionate change in quantity demanded.