Historically elastic sources of oil demand are becoming more predictable at a variety of prices, and this is driving OPEC to raise demand forecasts.

In this example, demand for Company A's product is more inelastic than for Company B's. The following table illustrates these concepts.

The cross price elasticity of demand measures how the demand for one good responds to price changes for another good. Companies use it to set prices.

Example of Elastic Demand A hypothetical example of a product with elastic demand could be an airline ticket. There are several airlines available, which make it a very competitive market. Let's ...

To illustrate an example of elastic demand, say the price of a good increases by 1% and the demand for it decreases by 2%. Since demand changed by more than price, the good has elastic demand. If ...

For example, if a 1 percent price increase leads to a decrease in demand of 2 percent, then the item has an elastic demand. These items usually have many substitutes or are luxury items.

Business Examples of Income Elasticity. A business' demand for a good is based on the price of the good. When prices rise, the business will buy less of the good.