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 and many people will buy them regardless of price. [[Income elasticity of demand]] for a necessity is less than one. | |
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| + | [[Category:Economics]] | ||
Latest revision as of 14:14, September 18, 2011
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.