The concepts of elastic and inelastic demand are used in economics to describe change processes, and the differences between the terms are defined by the amount of change occurring within a given system. Areas of economic study related to supply and demand utilize these concepts.Know More
Elastic demand means that the amount or quantity of a certain product changes in large measure when the price of the product changes, particularly when the percentage of change in the quantity of the product being demanded is greater than the change in price. Inelastic demand means that the amount or quantity of a certain product changes in small measure when the price of the product changes, particularly when the percentage of change in the quantity of product being demanded is less than the change in price. Elasticity and inelasticity relate to the magnitude of change within the system.
Elastic and inelastic demand are measured as the percentage of change in the demand for something divided by the percentage of change in price. Similarly, elastic and inelastic supply are measured as a percentage of change in the supply of something divided by the percentage of change in price. Elasticities are recorded as negative numbers, since demand curves are always negative sloping.Learn more about Economics
Examples of elastic goods are coffee, airline tickets and stocks. Examples of inelastic goods are water, electricity, and telephone service. The elasticity of a good is the sensitivity of its demand to changes in its price.Full Answer >
Examples of products that have elastic supplies are specifically branded items that have alternatives like Campbell's soup, Marlboro cigarettes and Porsche vehicles; products that have inelastic supplies are cigarettes, gasoline and salt. Products that have an inelastic supply are products that do not have a viable alternative, and buyers will continue to buy them despite the price increase.Full Answer >
Economics and economic education are important for providing people with valuable insight into how foreign and domestic markets operate, which allows them to make reasoned and rational choices for short-term and long-term financial benefits. Studying economics also allows people to learn how to manage and most effectively use scare and finite resources such as time and money. Studying economics equips people with varying levels of financial literacy, which allows them to effectively manage their own finances and even advise others in financial management and planning, too.Full Answer >
Economics plays a vital role in making modern civilization function, so studying economics helps experts learn how to prevent problems. Studying economics also helps when running or managing a business. Economics is often viewed as a scientific field.Full Answer >