Demand of iPhone a producer can raise prices without much hurting demand for its product, and elastic demand means that consumers are sensitive to the price at which a product is sold and will not buy it if the price rises by what they consider too much.

The elasticity of apples therefore is: 0.20/0.06 = 3.33, The demand for apples is quite elastic.

In the real world, price elasticity of demand can be closely tied to brand reputation. For example, Apple has inelastic products because changes in price have little effect on demand: shoppers will still line up outside the store for a new Apple product.

Answer and Explanation: Demand for milk tends to be inelastic because milk is a necessity (as opposed to a luxury), which mean that consumers tend to purchase the same amount…

Milk powder can be stored and has a reasonable shelf life which means producers of milk powder are better able to respond to price changes and more easily increase their quantity supplied which makes milk powder more elastic in terms of PES (as the response to a change in price is larger).

Perfectly inelastic demand means that prices or quantities are fixed and are not affected by the other variable. Unitary demand occurs when a change in price causes a perfectly proportionate change in quantity demanded.

Examples of inelastic demand

• Petrol – those with cars will need to buy petrol to get to work.
• Cigarettes – People who smoke become addicted so willing to pay a higher price.
• Salt – no close substitutes.
• Chocolate – no close substitutes.
• Goods where firms have monopoly power.

Examples include pizza, bread, books and pencils. Similarly, perfectly elastic demand is an extreme example. But luxury goods, goods that take a large share of individuals’ income, and goods with many substitutes are likely to have highly elastic demand curves.