What is the difference b/w the Elasticity and Inelastic?

Question

Answer

Elastic Demand:

1. When a small change in price brings about more than proportionate change in demand, it is known as the elastic demand.

2. The demand curve is flatter.

3. Luxuries and comforts have elastic demand.

4. Examples of elastic demand are Color T.V. sets, Prestige goods, etc.

5. Perfectly elasticity of demand is not practical, while relative elasticity is seen in case of moderately priced goods.

6. The coefficient of elasticity of demand is greater than 1, that it ed > 1.

Inelastic Demand:

1. When a big change in price brings about less than proportionate change in demand, it is known as inelastic demand.

2. The demand curve is steeper.

3. Necessary items can be termed as inelastic demand.

4. Examples of Inelastic demand are salt, rice, food grains, etc.

5. Perfectly inelasticity of demand is seen in the demand of necessary goods, while relative inelasticity is seen in case of very expensive goods.

6. The coefficient of elasticity of demand is less than 1, that is ed < 1.