What is the difference between an elastic good and an in-elastic good?
The demand for a good which is elastic will react significantly to a change in price of a good. So if I was selling mars bars in a shop ( and mars bars were an elastic good) if I increased the price of a mars bar a significantly lesser amount of people would purchase mars bars. And if I decreased the price of mars bars a significantly more about of people will buy mars bars. The key word is significantly. The quantity demanded is very sensitive to the price of the good. So it makes sense for the shop keeper to keep the price low to increase the demand.
If mars bars were an In-elastic good then the demand for them would hardly react at all to a change in price of the mars bar. So if I increased the price of the mars bars the amount of people buying them would only fall slightly. So the quantity demanded for a good is much less price sensitive. So it makes more sense for the shop keeper to increase the price, as he knows demand will still stay high.
An example of an elastic good is ; chocolate bars, cars, bikes.
An example of In- elastic goods are; your water supplier, train tickets, petrol.
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