Difference between revisions of "Necessities"
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| − | '''Necessities''' are goods for which demand is [[inelastic]]. An increase in price for these goods does not reduce the demand much, because these goods are essential. [[Income elasticity of demand]] for a necessity is less than one. | + | '''Necessities''' are goods for which demand is [[inelastic]]. An increase in price for these goods does not reduce the demand much, because these goods are essential and many people will buy them regardless of price. [[Income elasticity of demand]] for a necessity is less than one. |
[[Category:Economics]] | [[Category:Economics]] | ||
Revision as of 21:33, July 30, 2010
Necessities are goods for which demand is inelastic. An increase in price for these goods does not reduce the demand much, because these goods are essential and many people will buy them regardless of price. Income elasticity of demand for a necessity is less than one.