Distinguish between perfectly elastic demand and perfectly inelastic d

1.	Distinguish between perfectly elastic demand and perfectly inelastic demand.
Answer» Elasticity measures how the demand of a product/good reacts to changes in the price of a good/product. Goods/products with few substitutes and are considered highly NECESSARY or part of society's daily needs FOLLOWS inelastic demand. For example, even when gasoline increases price, the demand of gasoline will not be GREATLY affected as there is currently very few substitutes to gasoline and gasoline is highly important in a society to fuel cars. Goods/products with NUMEROUS substitutes and/or not a part of society's daily needs follows inelastic demand. For example, when Coke increases in price, the demand of Coke is greatly affected (decreased). This is because consumers may buy other carbonated drinks which are relatively CHEAPER.

Distinguish between perfectly elastic demand and perfectly inelastic demand.

Answer»

Elasticity measures how the demand of a product/good reacts to changes in the price of a good/product.

Goods/products with few substitutes and are considered highly NECESSARY or part of society's daily needs FOLLOWS inelastic demand.

For example, even when gasoline increases price, the demand of gasoline will not be GREATLY affected as there is currently very few substitutes to gasoline and gasoline is highly important in a society to fuel cars.

Goods/products with NUMEROUS substitutes and/or not a part of society's daily needs follows inelastic demand.

For example, when Coke increases in price, the demand of Coke is greatly affected (decreased). This is because consumers may buy other carbonated drinks which are relatively CHEAPER.

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