Question

Mention one example of inelastic demand. Give a reason in support of your answer.

Answer 1

1:There are many good which exhibit such inelastic demand pattern, few examples being : Necessary goods like salt and sugar. It is difficult to give up consumption of such goods when their prices go high as they are necessities. Goods which have no close substitutes like electricity and eggs.
2:Goods to which consumers become habitual like, cigarettes, alcohol, etc, generally possess inelastic demand. For these goods, proportionate change in quantity demand is lesser than the proportionate change in price.