Petrol has inelastic price elasticity of demand in both short and long run but chinaware has elastic price elasticity of demand in both short and long run because:
A)petrol is more important than chinaware.
B)petrol is a necessity and chinaware is a luxury.
C)petrol cannot be compared to chinaware.
D)petrol is a luxury and chinaware is a necessity.

Question

Quizplus · Accepted Answer

Petrol is a necessity for daily life and many economic activities, while chinaware is a luxury item that can be substituted with other similar items. This means that consumers are more likely to adjust their demand for chinaware in response to changes in price, making it relatively more elastic compared to petrol. Additionally, over a longer time period, consumers may have more opportunities to find substitutes for chinaware, further increasing its price elasticity of demand.

Petrol Has Inelastic Price Elasticity of Demand in Both Short