Explain why demand for food is relatively price inelastic?
Food is relatively price inelastic as it is considered a necessity which means that everyone needs it. If price were to rise there wouldn't be any change in consumption as people require it to live so therefore would carry on purchasing it. Furthermore there are no significant substitutions to food, everyone requires it. This also means that a rise in price would lead to no significant change in consumption. As a result food is clearly price inelastic.
JR
Related Economics GCSE answers
All answers ▸Evaluate the use of supply side policies as a means of controlling UK inflation (30 marks)
Explain why a government budget deficit is likely to stimulate economic growth.
Define the term PPF and illustrate it.
Define what market failure is and identify an example of market failure, explaining fully why it is a relevant example.