Question

Which is more elastic or inelastic demand? Use the determinants of elasticity of demand and explain why.

a) Oil today versus oil in future

b) Casio watch versus Diamond Hublot watch

c) Cable TV versus electricity

d) Helium versus peanut butter jelly

e) iPhone 8 versus mobile phone

Answer 1

a) Oil today is more inelastic than the oil in the future because in the future there will be more substitute of oil like solar or electronic car.

b) Casio watch is more inelastic as compared to a diamond watch because diamond watch will be luxury and luxury goods are more elastic.

c) Cable Tv will be more elastic compared to electricity in the market because electricity doesn't have any substitute but cable TV has many.

d) Helium jelly will be more elastic as compared to a peanut butter jelly because peanut butter jelly is a regular use good and every house hold needs it.

e) iPhone will be more elastic because it has many substitute but mobile phone as a good doesn't have much substitutes.