When -0 < E <-1, the demand is said to be elastic. When –1 < E<0, the demand is said to be inelastic. When E = -00, the demand is perfectly elastic and when E = 0 the demand is perfectly inelastic. Essential goods such as basic foods tend to have inelastic demands; discretionary items, such as electronic equipment have elastic demands. Explain the meaning of these terms in this context.

When -0 < E <-1, the demand is said to be elastic. When –1 < E<0, the demand is said to be inelastic. When E = -00, the demand is perfectly elastic and when E = 0 the demand is perfectly inelastic. Essential goods such as basic foods tend to have inelastic demands; discretionary items, such as electronic equipment have elastic demands. Explain the meaning of these terms in this context.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter7: Demand And Supply

Section7.2: The Demand Curve And Elasticity Of Demand

Problem 6R

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