Explain why quantity demanded does not change in response to an increase or decrease in price.

Elastic vs Inelastic Demand

Write a discussion post that identifies real world goods or services that have elastic/inelastic demand.

*Name a specific good or service that has inelastic demand .
*Explain why quantity demanded does not change in response to an increase or decrease in price.
*Then name a specific good or service that has elastic demand.
*Explain why quantity demanded does change a lot in response to an increase or decrease in price.
*Which of these two goods is most likely to be taxed.

The demand for gasoline is relatively inelastic. If the price of gas increases, people still have to drive to work and/or school. Therefore, when the price of gas increases people do not reduce the amount of miles they drive per week very much. Similarly, if the price decreases people won’t start driving all over the place the state just because gas is cheap. On the other hand, the demand for peanuts is relatively elastic. If the price of peanuts increases by a lot, many people would simply stop purchasing peanuts and start buying some other snack.