Necessity (food grains, vegetables, medicines): Demand is generally inelastic — required for human survival, demand does not fluctuate much with price change.

Comfort (fan, refrigerator): Demand is generally elastic — consumer can postpone consumption.

Luxury (AC, Smart TV): Demand is generally more elastic as compared to comforts.

"Luxury is a relative term — an item (like AC) may be a luxury for a poor person but a necessity for a rich person."

Elasticity is generally less for higher income level groups in comparison to people with low incomes.

Rich people are not influenced much by price changes.

Poor people are highly affected by price increase or decrease.

Demand for lower income group is highly elastic.

Commodities with non-urgent demand (biscuits, soft drinks): Highly elastic — consumption can be postponed if price rises.

Commodities with urgent demand (life-saving drugs): Inelastic — immediate requirement.

Greater the proportion of income spent on a commodity → more is the elasticity of demand.

Goods like salt, needles, soap, match boxes: Inelastic — consumers spend a small proportion of income.

If the proportion of income spent is large, demand will be elastic.

Commodities that have become habitual necessities: Less elastic demand.

Such a commodity becomes a necessity and the consumer continues to purchase it even if price rises.

Examples: Alcohol, tobacco, cigarettes.