Difference Between Elastic and Inelastic
If you are new to economics, there is nothing to worry about. All you have to know is economics spins around the subjects – supply and demand. When it comes to supply, all you have to know is that it is nothing but the available goods that you can buy from any market and demand is your desire to buy them.
Let’s dive deeper into the demand concept. There are two basic variations in demand – elastic and inelastic variation. There is a major difference between elastic and inelastic that we are going to discuss in this article. Before anything, let’s learn what is elastic and inelastic demand.
Definitions of Elastic and Inelastic
We switch on the TV to watch news and an economist starts talking about various types of demands and how it is going to impact the present economy. We can’t help but wonder what does elastic and inelastic mean in terms of demand.
Imagine you go to a gas station and want to buy gas, but one fine day you find the price has reached sky high. This happens when there is a monumental demand for petrol. The other facet related to money that is sure to have an affect on this concept is income and procurability of the commodity. All the goods that you buy for a luxurious and comfortable life come under elastic demands. These are all price sensitive things. Even a small up or down in the price can make a huge difference.
When you talk about inelastic demand, it is quite the opposite of its counterpart in terms of many aspects. Say you are looking to buy something that is really necessary for your survival, example: salt, and you find day by day the price has not fluctuated at all. This particular product is brought by everyone in the world even then, the price remains almost the same all the time. This is nothing but inelastic demand.
If you are still confused about the elastic and inelastic definition, take a look at the elastic and inelastic examples. The former can be represented by all the things you buy to make your life comfy and luxurious. On the other hand, the latter can be represented by every necessary things we buy in this world.
What is the Difference Between Inelastic and Elastic Demand?
Looking at the above definitions, you can easily note down the difference between elastic and inelastic. However, if the question – what is the difference between inelastic and elastic? – is still bothering you, we have laid down everything below for your better understanding.
Like explained before, elastic demand is when there are huge changes in the demand depending on various factors including price and income. But when we talk about inelastic demand, you will see that the rate of the commodity does not go up or down as much as the demand.
When you jot down all the factors down in a graph, you will see that the curve is shallow. However, when you talk about its counterpart, you will see that the curve is steep.
Let’s talk about the relation between the price and the money that the owner makes in both the type of demands. In the first type, you will see that the price and revenue are moving in the opposite direction. As far as inelastic demand is concerned, both the factors move together hand in hand, in one direction.
Finally, when we are talking about what is the difference between elastic and inelastic we cannot miss out on giving some examples. All your luxury and comfort goods come under elastic type of demand. And all your regular goods that you buy for your necessity fall under the inelastic category of demand.
Elastic vs Inelastic Comparison Table
|Basis of Comparison||Elastic||Inelastic|
|Definition||Small fluctuation in price results in huge difference in demand||Fluctuation of price does not make any difference for the demand|
|Graph||Curve is shallow||Steep curve|
|Price and revenue||Move in opposite directions||Move hand in hand|
|Example goods||Luxury, comforts||Necessity|
Conclusion of the Main Difference Between Elastic vs Inelastic
Whenever a reporter on the news talks about the above aspects of demand, don’t get lost in your confusing world. The difference is very easy to remember. When there is even a slight change in the rate of any of your favorite thing, the demand automatically gets hit to a huge extent.
This concept is nothing but elasticity. If you are buying things and you notice there is a slight dip or raise in the rate, even then the demand of those goods remain as it is. This implies inelasticity.