Question

Analyze two goods/services that you think are elastic and inelastic in your daily life that you have recently purchased or not when the price changes(relate your answer to the characteristics of elasticity). If you were a manager of a store, what would you rather sell, inelastic or elastic goods/services. Please explain your answer.

Answer 1

elastic goods: electronic gadget and vehicles

As the prices of electronic gadgets and the vehicles changes there is lot of change in the demand for these goods which indicates that they are highly elastic in nature .It means when the price increases the demand for such goods decreases and when the price decreases the demand for such goods increases.

inelastic goods: medicine and necessary goods

Even there is increase in the prices of medicine and other necessity goods then also the demand for such good do not changes it means such goods are inelastic in nature.

If I would have been the manager of a store house then I would like to sell inelastic goods so that if the price of such goods increases then also people are compelled to buy goods so that my revenue is not hampered. In case of inelastic good there is certainity of sale whether it is a period of low income or high income. Such goods are demanded in every situation of life.