Question

Think of a good that you believe is highly inelastic and poll at least ten people about how their consumption would change if the price changed [change: choose any good - do you think demand is elastic or inelastic? Then do poll]. You should ask each person a) how much they currently buy of the good at current prices, b) how much price would have to change before they would reduce their consumption (if they say they would always buy the same amount, ask how much they would buy if the price were to double, or triple, or quadruple), and c) what sort of changes they would make if price were to increase (for example, what other goods would they buy instead? Would they make different changes in the long-run versus the short-run?). Your write-up should include: A) What is the good and why do you believe demand for this good is highly inelastic? B) What is the current price for this good? C) How many people did you survey? Summarize their answers to the above questions

Answer 1

Answer:

A )

The inelastic demand means the demand for the good will not reduce or increase in response of price changing. While when the quantity demanded is highly responsive to the price then it is said to be elastic demand. The demand curve will be vertical or parallel to Y axis. The inelastic good mainly the food products like salt, milk, wheat etc. I came thorough the sample that the demand for these products will not change whether the price rise or fall because these are among the necessity goods which most of consumer buy without these they can't live.

b)

The current price of these products in Indian currency is:

Milk - 60/ litre.

Whether the price rise or fall the quantity of milk will be demanded same as before the change in price of milk.

c)

I have done survey among 10 people , from my neighborhood. And the summary about this is :

I came across same answer from many people like they will not change their quantity demanded of these products as they are life saving products. If there is chances of increase in price in near future then quantity may vary from 2-3 units in the good which can be stored carefully otherwise the quantity demanded will not change. The quantity demanded is same before or after the change in price. The quantity demanded by consumer is differ from person to person because of their intake capability of eating or drinking that good.