Question 46 of 48
Q.Give reasons or explain the following statement:
Demand for necessary goods is inelastic.
Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2020Subjective· 2mImportance★★★★★
96% · 46/48 Questions
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Start your 14-day free trial to unlock the full solution →Demand for necessities is inelastic because they must be consumed irrespective of price changes.
Necessary goods (food grains, salt, medicines, basic clothing) are essential for survival and daily living. Consumers cannot postpone or greatly reduce their consumption when the price rises, nor do they buy much more when the price falls. Hence the change in quantity demanded is less than proportionate to the change in price, i.e. elasticity is less than one (inelastic). Their small share in the budget and lack of …
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