let's discuss elasticity. Talk about 5 items that you purchase, or would purchase,Â tha

1. Organic banana :If the price of an organic banana falls below $1/lb, I would buy an extremely large
number of banana. This is an example of Price Elasticity of Demand = Infinity (When a small change in price of a product causes a major change in its demand)[/color].

2.[b] SALT:[/b] that the price of salt is reduced, this doesn't mean that an individual will start consuming more salt.On the contrary even if the price of salt is increased your consumption wouldn't change. This is an example of Perfectly Inelastic Demand. A perfectly inelastic demand is one when there is no change produced in the demand of a product with change in its price.

3. air-travel: A decrease in the air fare will lead the vacationer to choose travel through an airplane rather than other transportation like car. Thus for a reduction in air fare for the vacationers we will see a relatively more drastic increase in quantity demanded and hence lower price elasticity of demand. This is an example of Relatively Elastic Demand. Relatively elastic demand refers to the demand when the proportionate change produced in demand is greater than the proportionate change in price of a product.

4. petrol : if we observe the prices of petrol and comparing its demand change with the change in price levels of petrol (even though the price changes to great extent, there will not be much change in demand). You need it to run your car. You presumably won’t buy less fuel just because the price goes up. You might buy it in smaller quantities - but all else equal - if you need 20 gallons of gas per week - then you will buy 20 gallons that week. this is an example of Relatively Inelastic Demand. Relatively inelastic demand is one when the percentage change produced in demand is less than the percentage change in the price of a product.

5. b]cameras[/b]: The price of digital cameras increases by 10%, the quantity of digital cameras demanded decreases by 10%. The price elasticity of demand is (unitary elastic demand).
This is an example of Unitary Elastic Demand:When the proportionate change in demand produces the same change in the price of the product, the demand is referred as unitary elastic demand.

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let's discuss elasticity. Talk about 5 items that you purchase, or would purchase,Â tha

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