Elasticity Flashcards
1
Q
What is elasticity of demand?
A
Elasticity is how sensitive quantity demanded is to a change in price.
2
Q
What is meant by in elasticity demand?
A
Inelastic demand is when the price changes as quantity is insensitive/ unresponsive.
3
Q
What is an example of an inelastic product?
A
Fuel
4
Q
What is elastic demand?
A
Elastic demand is when quantity is sensitive to a change in demand.
5
Q
4 factors that might make demand for a product inelastic
A
- The number of substitutes available.
- Degree of necessity.
- Whether it’s subject to habitual consumption.
- Peak and off peak demand.
