2.3 - Elasticity of Demand
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Practice Questions
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Define elasticity of demand in your own words.
💡 Hint: Think about how a rubber band reacts to force.
Give an example of elastic demand.
💡 Hint: Consider what you might stop buying if prices increase.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does elastic demand mean?
💡 Hint: Think about the consumer's reaction to luxury items.
Is inelastic demand sensitive to price changes?
💡 Hint: Consider necessities that people always buy.
1 more question available
Challenge Problems
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A company raises the price of its product by 20%, and demand decreases by 10%. Is the demand elastic or inelastic? Explain your reasoning.
💡 Hint: Develop a ratio comparing price changes to demand changes.
Consider two products: one is a necessity, and the other is a luxury. If both have a price increase of 15%, discuss the potential demand responses.
💡 Hint: Think about consumer priorities when prices increase.
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