When -0 < E <-1, the demand is said to be elastic. When –1 < E<0, the demand is said to be inelastic. When E = -00, the demand is perfectly elastic and when E = 0 the demand is perfectly inelastic. Essential goods such as basic foods tend to have inelastic demands; discretionary items, such as electronic equipment have elastic demands. Explain the meaning of these terms in this context.

When -0 < E <-1, the demand is said to be elastic. When –1 < E<0, the demand is said to be inelastic. When E = -00, the demand is perfectly elastic and when E = 0 the demand is perfectly inelastic. Essential goods such as basic foods tend to have inelastic demands; discretionary items, such as electronic equipment have elastic demands. Explain the meaning of these terms in this context.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

9. When -0 < E < -1, the demand is said to be elastic. When –1 < E<0, the demand is said to be inelastic.
When E = -00, the demand is perfectly elastic and when E = 0 the demand is perfectly inelastic. Essential
goods such as basic foods tend to have inelastic demands; discretionary items, such as electronic equipment
have elastic demands. Explain the meaning of these terms in this context.

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