Question

State with reasons whether you agree or disagree with the following statement:

The elasticity of demand gets influenced by the nature of the commodity.

Options

• Agree

• Disagree

Answer 1

I agree with the above statement.

Reasons:

1. The nature of commodities is one of the important factors influencing the elasticity of demand. We can classify commodities as necessities, comforts and luxury goods.
2. Consumption of basic items such as salt, medications, and so on is critical for survival and cannot be delayed. As a result, the demand for such things is less elastic.
3. Because the consumption of comfort and luxury products like vehicles, perfumes, jewellery, and so on is not critical for survival, their demand can be delayed. As a result, demand for such things is more elastic.

Thus, the elasticity of demand is influenced by the nature of the commodity.