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Inelatic Demand
According to Roger (2008), the elasticity of demand is the degree of change that variations in price have on the quantity of a good that is demanded in the market. This change is measured in terms of ratios and percentages. An inelastic demand exists when the percentage of change in the quantity demanded of a good is lower than the percentage change in its own price (Roger, 2008). The following are some of the best examples of good with inelastic demand.
Salt has an inelastic demand since the quantity demandended does not change a lot with the changes in its price. For instance, if the price of a box of salt changes from $5 to $10, the quantity of salt consumed will not change. The lack of change is what describes the inelasticity of the demand of salt to its own price, since people will continue to use the same salt levels in their foods. Even if the price of salt reduces to $1, the demand of salt will remain unaffected of slightly affected.
Secondly, cigarettes are goods with inelastic demand due to the inevitability of a smoker to take a puff when the urge to smoke comes in. If the price of a packet of cigarete increases, for instance from $7 to $10, the smokers will still buy cigarettes because it is a form of addiction that they have to satisfy. Therefore, the quantity of cigarettes demanded will not change a lot. Even if the price of cigarettes reduce, for instance from $7 to $4, smokers will still enjoy the same quantity of cigarettes they used to. Lack of significant change in the quantity demanded of a good describes the existence of inelastic demand (Roger, 2008).
Reference
Roger, A. (2008). Economics. New York: Cengage Learning