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Question
State whether demand will be Elastic or Inelastic. Give reasons for your answer.
A consumer prefers to postpone the purchase of a car to avail more of year ending discount.
Solution
If a customer waits to buy a car in order to take advantage of greater year-end discounts, the car will have 'elastic demand' because commodities with postponed consumption tend to have elastic demand, meaning that a slight increase in price will force customers to defer their previously planned consumption.
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