Answer to Question #83583 in Microeconomics for Jesper Lim

Question

Malaysia petrol price changes weekly. Using elasticity to explain.

Answer 1

Petrol is a product that can be easily be substituted therefore has a relatively inelastic demand. As the price of petrol increases in Malaysia, there is little impact on the quantity demanded. In other words, changes in price of petrol in Malaysia does not have significant influence on demand.