Question

Discuss two products that you purchase on a regular basis. Your demand for one product should be elastic, and the demand for the other product should be inelastic. In an entry of at least one paragraph, describe each product and why your demand for each is elastic or inelastic.

Answer 1

Elastic good are those which have a large number of substitute available and inelastic are those whose less or no substitutes are available.

Elastic good such as furniture, mobile phone etc. The price of furniture and mobile phone is large therefore, it consumes a larger portion of the budget. Hence, we think over number of times before buying it and compare with other available options. So, that we are able to buy the best product with limited budget.

Inelastic demand: The demand for products such as pen, petrol, cigarettes are inelastic. Consider the example of pen the price of pen is very low thus it is inelastic in nature. Similarly, petrol is also inelastic(when we possess a vehicle) as we continue to purchase petrol even though the price increases. Addict smokers are less bothered about the price thus when the price of cigarette increases then also they continue to buy.