Key Questions

  • Example of inelastic demand curve: salt. If the price of salt increases, you won't rush to the supermarket to buy a lot of salt. That way, you are not reacting much to the change of price.
    Example of elastic demand curve: chocolate. If the price of chocolate increases, you may not want to buy it anymore, preferring a substitute good, like cookies or other sweets. That way, you are reacting to the changes in price.