Elastic Goods

Elastic goods are products for which consumers significantly change their purchasing habits when prices change. If the price of an elastic good goes up, people tend to buy less of it; if the price drops, they buy more. Examples include luxury items, electronics, and non-essential clothing. The demand for these goods is sensitive to price changes because they are not necessary for daily life. Conversely, inelastic goods, like basic medicines or essentials, see little change in demand when prices fluctuate. Understanding whether a good is elastic helps businesses set optimal prices and predict how sales might respond to price adjustments.