What's the difference between an elastic good and an inelastic good?

An elastic good is a good that has a price elasticity of demand that is greater than one. This means that the demand for the good will change significantly if the price changes. An example of such is coke-a-cola. If the price of coke-a-cola were to rise by 1 pound, most consumers would switch to pepsi, or another substitute. An inelastic good is a good that has a price elasticity of demand that is less than 1, meaning that demand for that good will not change significantly if the price is altered. An example of an inelastic good is insulin, as there are very few substitutes to insulin.

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