Price Elasticity of Demand: Examples

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mstakh.i.mo.mi
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Price Elasticity of Demand: Examples

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Price inelasticity and elasticity of demand are further classified into different types including perfectly elastic, unitary, and perfectly inelastic.

Here is a look at some examples of price elasticity of demand to understand the concept in a better way:

Airline Tickets
It has been observed that any modifications in the price of airline tickets result in a change in their demand. It is thus a perfect example of price elasticity of demand. For instance, if the airfare for travelling from jordan phone number list Delhi to Goa increases from INR 4,000 to INR 7,000 per ticket, then the demand for air tickets on this route is likely to fall. When the ticket fare increases, consumers look for other means to travel. They may opt for their vehicle, train, or bus. Alternatively, they may postpone their travel plans.

On the other hand, if the price of air tickets from Delhi to Goa decreases from INR 4,000 to INR 2,500 per ticket, then their demand is likely to increase. People tend to advance their leisure or even business trips if there is a dip in the airfare.

Decorative Items
Decorative items are not a necessity. Thus, their purchase can be delayed or avoided altogether. Besides, there are several alternatives available when it comes to these items. This makes decorative items price elastic. People usually compare and contrast the rates of these items at different online and offline stores to pick the most lucrative deal. If a shop increases the price of its decorative items by even 20-25% then it is likely to witness a decrease in its sales owing to the various factors stated above.
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