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Oil is inelastic because it is a normal product , if the price goes up the consumers will still need to buy it because there are few substitutes such as the gas and the green energy, and the oil is necessity for the consumers. however,any increase in the price of oil will not lead to decrease in the consumption in large quantity. In this point we can argue from two perspectives
Firstly, the consumers perspectives: if the price of oil goes up then the consumer will tend to find alternative to oil. For example, the consumer will not use their own transportation, they will tend to use the public transportation, however there will be some people who can afford the rising prices, hence they will continue consuming the oil .
Secondly, the governmental perspective: if the price goes up and it has long term upward trend then the government will try to invest in the other source of power such as green energy.
Hence, the oil is inelastic but in the short term and the next chart can explain the two perspectives.
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Why is oil inelastic?
because its used with material
If the demand for a good is inelastic and the price of the good decreases?
Increase. Inelastic demand means that most consumers will continue to buy a good regardless of price.
A good will tend to have an inelastic demand if?
inforior good
Why gasoline is inelastic?
Elastic if there are substitutes which is unlikely but possible as green energy is a growing market Inelastic if there are no substitutes which is mostly the case as in the case of oil, the price is set by the supplier and the consumer relies heavily on it.
Are cereal companies inelastic or elastic?
no cereal companies are not inelastic because there is not a crucial demand for cereal if cereal companies were too raise the price of cereal to an ridiculously price there is a good chance that consumers will stop buying so that makes cereal elastic.........examples of inelastic companies are industries like pharmacuticals,oil , higene etc. things that we need.
If a price change causes the quantity demanded of a good to decrease by 30 percent while total revenue of that good increases by 15 percent is the demand curve elastic or inelastic?
inelastic
What is an example of an inelastic good?
A good is inelastic if after a 1% increase in price the quantity demanded falls by less than 1%. Essentials such as petrol tend to be inelastic as do addictive products such as cigarettes.
The key factor that determines whether the supply of a good will be elastic or inelastic is .?
time
What are needed to determine the equilibrium price of a good or service?
Consumers have inelastic demand
What is the The key factor that determines whether the supply of a good will be elastic or inelastic?
Time
Is salt an elastic or inelastic product?
Inelastic
If a small percentage increase in the price of a good greatly reduces the quantity demanded for that good the demand for that good is?
price inelastic
