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What does elasticity mean?   If the demand for a product is inelastic, what are the implications?

What does elasticity mean?   If the demand for a product is inelastic, what are the implications?

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Expert Solution

Elasticity simple meaning is that responsiveness of one variable to with respect to another variable .

elasticity of demand means response of change in quantity demand with respect to change in the price.

if the demand is inelastic it means the response of change in price with respect to price demanded is very little .

For example if prices changes at a very higher rate but in response of it the quantity demand will not change at that rate.

The example can be basic necessity good like water, food.

Rahul Sunny answered 2 years ago
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