Economics Elasticity Of Demand Questions
The concept of price elasticity of demand for necessities refers to the responsiveness or sensitivity of the quantity demanded of essential goods or services to changes in their prices. It measures the percentage change in quantity demanded divided by the percentage change in price. In the case of necessities, which are goods or services that are essential for survival or basic needs, the price elasticity of demand is typically inelastic, meaning that changes in price have a relatively small impact on the quantity demanded. This is because consumers are willing to pay a higher price for necessities due to their essential nature and limited substitutes available.