Microeconomics
Elastic demand is where the elasticity is over 1.0, inelastic is where it is less than 1.0. What this means is that elastic demand sees demand change to a greater degree than the price change, while inelastic demand sees demand change to a lesser degree than the price change.
Substitution is a key factor in the demand curve, because the more likely consumers are to substitute, the more likely demand is going to change strongly with a change in price, because consumers just start buying a different product instead. Demand will be elastic when there is high propensity to substitute, or when the product is an unnecessary item.
Income elasticity helps to determine if a good is normal or inferior, because demand for normal goods increases as income increases, while demand for inferior goods should decrease when income increases because consumers substitute superior products.
If a good is a complement, demand for one will rise while demand for the other rises (say, pork chops and apple sauce). If a good is a substitute, demand...
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