Demand for the commodity having multiple uses has elastic demand.
Give reasons or explain the following
Demand for the commodity having multiple uses is elastic.
Demand for a commodity which satisfies different kinds of uses has more elastic demand. Such good which satisfies various wants at a single time is said to be composite goods. For instance, electricity for domestic purpose is composite demand as it is used for various purposes. The demand for such commodities is elastic.
Demand for the commodity having multiple uses is elastic demand because the demand for a particular commodity which can be used in a variety of ways will be more affected by the changes in price.
* A commodity is said to have elastic demand if it is sensitive to the changes in price. The higher the change, the higher is the elasticity.
* A commodity having a single use or a number of substitutes will have less elasticity in demand due to the same reason.
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