Question

For each of the following, state whether it has inelastic demand or elastic demand:

1. Luxury cars
2. Life saving drugs
3. Salt
4. English textbook of class X

Answer 1

Inelastic Demand:

1. Life-saving drugs: These are essential for survival, so the demand remains largely unchanged regardless of price changes.
2. Salt: Salt is a basic necessity with no close substitutes, so its demand is relatively insensitive to price changes.
3. English textbook of class X: As a required educational material, its demand is inelastic because students need it regardless of the price.

Elastic Demand:

1. Luxury cars: Luxury cars are non-essential, and demand for them is sensitive to price changes. Consumers are likely to reduce purchases if prices rise or seek alternatives.