Consider the following pairs of goods. For which of the two goods would you expect the demand to be more price inelastic? Why?

A. infant formula or breakfast cereal

B. heating oil over the course of a decade or heating oil over the course of a month.

C. food in general or Coca-Cola sodas

D. nasal decongestant spray or heart medicine

E. Motorola cellular phones or phones in general

Elasticity is categorized as "inelastic" when consumers change their buying habits significantly when prices change.

A.

Infant formula has more inelastic demand because of the lack of substitutes for the parents who need the infant formula for their child. They will continue to buy it regardless of the price changes.

B.

Heating oil over a month has a more inelastic demand. The consumer can't switch to a different heating system in a short period, but in a more extended period, like a decade, consumers will switch to another heating system.

C.

Food, in general, has more inelastic demand because food is a necessity. Coca-cola is not a necessity, and there are many brands of cola from which to choose.

D

Heat medicine has more inelastic demand because it is a necessity for those who need it. It is a life or death issue. The nasal decongestant is essential but not life or death like heart medicine.

E

In general, phones have more inelastic demand because people are dependent on them and are not likely to stop buying them when prices increase. Motorola cellular phones have many substitute brands that consumers can switch to if Motorola prices get out of line with their competitors.