Explain why food is price inelastic.
The price elasticity of a good measures the proportionate change in demand to an inital change in price. If a good is price inelastic it suggests that an increase in price leads to a less than proportionate change in demand.
Food can be considered a neccessity since it is neccessary for human survival; there are no substitutes for sustaining life. This means that food can be considered price inelastic since an increase in price will not lead to a significant drop in demand since consumers have no choice but to purchase the food.
RS
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