When the demand for product X is inelastic?Inelastic demand is when a buyer's demand for a product does not change as much as its change in price. When price increases by 20% and demand decreases by only 1%, demand is said to be inelastic. This situation typically occurs with everyday household products and services.
What happens to price when demand is inelastic?Price inelasticity offers firms greater flexibility with prices as the change in demand remains essentially the same whether prices increase or decrease. If the price goes up or down, you can expect consumers' buying habits to stay mostly unchanged.
What happens when a good is price inelastic?Key Takeaways. "Inelastic refers" to the static quantity of a good or service when its price changes. Inelastic demand means that when the price of a good or service goes up, consumers' buying habits stay about the same, and when the price goes down, consumers' buying habits also remain unchanged.
What is the value of the crossThe value of cross-price elasticity of demand between goods X and Y is 1.25, while the cross-price elasticity of demand between goods X and Z is -2.0.
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