Question

Which one of the following products would tend to have inelastic demand?

A) luxury sedans
B) candy
C) crude oil
D) Black Angus T-bone steak

Answer 1

C) crude oil

Step-by-step explanation:

Crude oil and its byproducts (gasoline, plastic, etc.) have a very inelastic demand, e.g. the price elasticity of gasoline is between -0.02 and -0.04.

On the other hand, luxury goods have a very elastic demand, totally opposite to oil. The same applies for the demand of candies. While the demand for beef tends to be unit price elastic (or near it).