The demand of which type of goods do not decrease with increase in its...
An increase or decrease in the price of such a good does not affect its quantity demanded. These goods have a perfectly inelastic relationship, in that any change in price does not change the quantity demanded.
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The demand of which type of goods do not decrease with increase in its...
Necessities are goods or services that are essential for human survival and cannot be easily substituted or avoided. These goods are necessary for maintaining a minimum standard of living and their demand does not decrease even with an increase in price. Let us understand this concept in detail.
Factors affecting the demand for goods
The demand for goods is affected by various factors such as price, income, availability of substitutes, tastes and preferences, and so on. When the price of a good increases, the demand for that good decreases, assuming all other factors remain constant. Similarly, when the price of a good decreases, the demand for that good increases.
However, this is not the case with necessities, as their demand remains constant even with an increase in price. Let's take an example of food. Food is a necessity and people need food to survive. Therefore, even if the price of food increases, people will continue to buy it because they need it to survive.
Why demand for necessities does not decrease with an increase in price?
The demand for necessities does not decrease with an increase in price due to the following reasons:
1. No substitutes: Necessities are goods or services that are essential for human survival and cannot be easily substituted or avoided. For example, medical services, education, and basic food items are necessities that people need to survive.
2. Income inelastic: The demand for necessities is income inelastic, which means that the demand for these goods does not change much with an increase or decrease in income. This is because people need these goods regardless of their income level.
3. No luxury element: Necessities do not have a luxury element attached to them. For example, a luxury car is not a necessity as people can survive without it. However, a basic car may be a necessity for some people as they need it for transportation.
Conclusion
In conclusion, the demand for necessities does not decrease with an increase in price as these goods are essential for human survival and cannot be easily substituted. It is important to understand the concept of necessities as it has significant implications for the economy and society.
The demand of which type of goods do not decrease with increase in its...
The example of necessities good is medicine if we need medicine than we can't think about it's price and we can't say we buy medicine when price decrease therefore the price of necessities good can't be affected by price