INELATIC DEMAND 3
Accordingto Roger(2008), the elasticity of demand is the degree of change thatvariations in price have on the quantity of a good that is demandedin the market. This change is measured in terms of ratios andpercentages. An inelastic demand exists when the percentage of changein the quantity demanded of a good is lower than the percentagechange in its own price (Roger, 2008). The following are some of thebest examples of good with inelastic demand.
Salthas an inelastic demand since the quantity demandended does notchange a lot with the changes in its price. For instance, if theprice of a box of salt changes from $5 to $10, the quantity of saltconsumed will not change. The lack of change is what describes theinelasticity of the demand of salt to its own price, since peoplewill continue to use the same salt levels in their foods. Even if theprice of salt reduces to $1, the demand of salt will remainunaffected of slightly affected.
Secondly,cigarettes are goods with inelastic demand due to the inevitabilityof a smoker to take a puff when the urge to smoke comes in. If theprice of a packet of cigarete increases, for instance from $7 to $10,the smokers will still buy cigarettes because it is a form ofaddiction that they have to satisfy. Therefore, the quantity ofcigarettes demanded will not change a lot. Even if the price ofcigarettes reduce, for instance from $7 to $4, smokers will stillenjoy the same quantity of cigarettes they used to. Lack ofsignificant change in the quantity demanded of a good describes theexistence of inelastic demand (Roger,2008).
Roger,A. (2008). Economics.New York: Cengage Learning