Practicing Success
Priya's father has become a dipsomaniac i.e. a person who consumes alcohol excessively. What elasticity does liquor offer to Priya's father? |
Elastic elasticity of demand Unitary elasticity of demand Inelastic elasticity of demand Both 1 and 3 |
Inelastic elasticity of demand |
Priya's father is a dipsomaniac and thus, for him the law of demand doesn't exists. The marginal utility derived from the consumption of extra glass of liquor will always give him extra satisfaction. Thus, we can say he has inelastic elasticity of demand. Inelastic demand of a commodity indicates that a change in price results in relatively less change in quantity demanded. As, irrespective of the price offered a dipsomaniac, due to his addiction, he will buy the commodity at any price. |