This question is about elastic demand vs inelastic demand.

How do you determine whether demand is elastic or inelastic?

By Zippia Team - Dec. 7, 2022

The main way to determine whether demand is elastic or inelastic is to see whether or not a demand for it drops if the price rises.

For an elastic good, it's pretty much guaranteed that raising the price will lower the demand for it. The reverse is true as well, meaning that if an uptick in demand occurs when the price is lowered, then it's likely it's an elastic good.

There will sometimes be a small burst of purchases for an inelastic good if the price drops, but over time the consumption of it evens out. People will buy extra if it's a good price - assuming it's nonperishable - but they don't consume more of it than they did before.

How do you determine whether demand is elastic or inelastic?

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