Difference Between Elastic Demand and Inelastic Demand
Difference Between Elastic Demand and Inelastic Demand
Differences between Elastic Demand and Inelastic Demand are explained in the below table,
| Elastic Demand | Inelastic Demand |
|---|---|
Demand for a product is elastic when a price change has a relatively large effect on the quantity demand. | Demand for a product is inelastic when a price change has a relatively small effect on the quantity demand. |
A reduction in a price raises demand much, and an increase in price falls demand much. | A reduction in price does not raise demand much, and an increase in price does not fall demand much. |
In general, food items, luxury items, and fast-moving goods are elastic since these products are replaceable on another product. | In general, gasoline, utilities, tobacco products, medical treatments, and prescription drugs are inelastic since these products are not easily replaceable with other products. |
The price elasticity coefficient will be more than 1. Ep > 1 | The price elasticity coefficient will be less than 1. Ep < 1 |
Differences between Elastic Demand and Inelastic Demand are explained in the below points,
- Demand for a product is elastic when a price change has a relatively large effect on the quantity demand.
Demand for a product is inelastic when a price change has a relatively small effect on the quantity demand. - Elastic demand is where a reduction in a price raises demand much, and an increase in price falls demand much.
Inelastic demand is where a reduction in price does not raise demand much, and an increase in price does not fall demand much. - In general, food items, luxury items, and fast-moving goods are elastic since these products are replaceable on another product.
In general, gasoline, utilities, tobacco products, medical treatments, and prescription drugs are inelastic since these products are not easily replaceable with other products. - The price elasticity coefficient will be more than 1 on elastic demand.
The price elasticity coefficient will be less than 1 on inelastic demand.
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