How can you tell and memorise the difference between price elastic and price inelastic?
Ah, I love the question! You know the word 'elastic' means flexible and can change easily. When something has elastic demand, it means the demand can very easily change if the price changes. For example, if the price of your local chicken shop doubles, you'll probably stop going because there's plenty of cheaper alternatives (the more alternatives there are, the more elastic the the demand is). Now let's look at the iPhone. The price for the iPhone X went up like crazy. It's about £1000. But the demand for it didn't really fall (if anything, it rose). This is because demand for iPhone's are usually inelastic. People will stick to it because they love the brand, even if it gets more expensive. Brand loyalty is one possible reason why certain products are inelastic. Remember: Elastic means flexible, so demand can easily change. Inelastic means it's not very flexible, so price changes don't affect demand as much. Hope that clears it up!
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