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In which of the following cases the demand for goods tends to be less elastic?
- a)Goods is necessary
- b)Time period is shorter
- c)Number of close substitutes is less
- d)All of the above
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
In which of the following cases the demand for goods tends to be less ...
Factors affecting elasticity of demand
Elasticity of demand is the measure of responsiveness of quantity demanded with respect to changes in price of a product. The degree of elasticity of demand can be affected by various factors. Some of these factors are discussed below:
Goods is necessary
When a good is considered necessary, the demand for the good tends to be less elastic. This is because consumers are more likely to continue purchasing the good even if there is a price increase, as they consider the good to be a necessity.
Time period is shorter
When the time period is shorter, the demand for the good tends to be less elastic. This is because consumers may not have enough time to adjust their consumption patterns in response to price changes. For example, if the price of petrol increases suddenly, consumers may not be able to immediately switch to a cheaper mode of transportation.
Number of close substitutes is less
When there are fewer close substitutes for a good, the demand for the good tends to be less elastic. This is because consumers have limited alternatives to choose from and are more likely to continue purchasing the good even if there is a price increase.
Conclusion
In summary, the demand for goods tends to be less elastic when the goods are considered necessary, the time period is shorter, and there are fewer close substitutes available.
Elasticity of demand is the measure of responsiveness of quantity demanded with respect to changes in price of a product. The degree of elasticity of demand can be affected by various factors. Some of these factors are discussed below:
Goods is necessary
When a good is considered necessary, the demand for the good tends to be less elastic. This is because consumers are more likely to continue purchasing the good even if there is a price increase, as they consider the good to be a necessity.
Time period is shorter
When the time period is shorter, the demand for the good tends to be less elastic. This is because consumers may not have enough time to adjust their consumption patterns in response to price changes. For example, if the price of petrol increases suddenly, consumers may not be able to immediately switch to a cheaper mode of transportation.
Number of close substitutes is less
When there are fewer close substitutes for a good, the demand for the good tends to be less elastic. This is because consumers have limited alternatives to choose from and are more likely to continue purchasing the good even if there is a price increase.
Conclusion
In summary, the demand for goods tends to be less elastic when the goods are considered necessary, the time period is shorter, and there are fewer close substitutes available.
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In which of the following cases the demand for goods tends to be less elastic?a)Goods is necessaryb)Time period is shorterc)Number of close substitutes is lessd)All of the aboveCorrect answer is option 'D'. Can you explain this answer?
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