Elasticity
Key Questions
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Example of inelastic demand curve: salt. If the price of salt increases, you won't rush to the supermarket to buy a lot of salt. That way, you are not reacting much to the change of price.
Example of elastic demand curve: chocolate. If the price of chocolate increases, you may not want to buy it anymore, preferring a substitute good, like cookies or other sweets. That way, you are reacting to the changes in price.
Bruno Pedron
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May 20 2015