Question : Which of the following goods is likely to have the least elastic demand?
Option 1: Cars
Option 2: Milk
Option 3: Airline tickets
Option 4: Movie tickets
Correct Answer: Cars
Solution : The correct answer is (a) Cars
The elasticity of demand for cars tends to be less elastic compared to the other goods listed. This is because cars are typically considered durable goods with long-term use and high costs. Consumers often make careful considerations and long-term planning when purchasing a car, and they may be less responsive to short-term changes in price.
On the other hand, goods like milk, airline tickets, and movie tickets are generally considered more elastic in terms of demand. Milk is a commonly purchased consumer good with many available substitutes, making it more responsive to changes in price. Airline tickets and movie tickets are also often subject to more immediate decision-making and have readily available alternatives, making their demand more elastic.
Overall, while demand elasticity can vary based on specific circumstances and market conditions, cars tend to have a relatively less elastic demand compared to goods like milk, airline tickets, and movie tickets.
