OMTEX CLASSES: RELATIVELY ELASTIC DEMAND RELATIVELY INELASTIC DEMAND

RELATIVELY ELASTIC DEMAND RELATIVELY INELASTIC DEMAND

Relatively elastic demand
Relatively inelastic demand
1.      Meaning
If the % change in quantity demanded of a commodity is more than proportionate change in its price, the demand is said to be relatively elastic demand.


2.      Numerical Value
The numerical value of relatively elastic is >1.

4.      Examples
Demand for comports and luxuries. E.g. car, air conditioners have relatively elastic demand.

If the % change in quantity demanded of a commodity is less than proportionate change in its price, the demand is said to be relatively inelastic demand



The numerical value of relatively elastic is <1


Examples
Demand for some habituated goods such as alcohol, cigarettes etc. Have relatively inelastic demand.