Elasticity Of Demand Flashcards
1
Q
What is meant by elasticity of demand?
A
Measures how sensitive a product is to a change in price
2
Q
What is meant by inelastic demand?
A
The product is insensitive to a change in price
3
Q
What is meant by elastic demand?
A
The product is sensitive to a change in price
4
Q
State three examples of inelastic products.
A
Fuel, train tickets, cigarettes
5
Q
State three examples of elastic products
A
Soup, newspapers, sofas
6
Q
State four factors which make the demand for a product inelastic
A
The number of substitutes available, the degree of necessity, whether the product is subject to habitual consumption and if the product is subject to peak and off peak timings
