Answer to Question #264908 in Macroeconomics for rohit

Question

“Individual demand depends on the demand of others”. Explain using demand supply

analysis with suitable graphs and examples.

Answer 1

Demand for items with easily accessible replacements is likely to be elastic, meaning it will respond more quickly to changes in the product's price. This is because, if the price of an item rises, buyers may readily substitute it with another. If there are no near replacements and the product represents just a small portion of the consumer's income, demand for the product may be inelastic. When demand for a product is somewhat inelastic, a company's overall revenue can be increased by raising pricing.