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Understand the concept of demand elasticity.

Economics

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Answer

B\text{B}

Step-by-step solution

4 steps

The final answer is B\boxed{\text{B}}.

  1. Understand the concept of demand elasticity.

    • Elastic demand means that the quantity demanded changes significantly in response to a change in price.
    • Inelastic demand means that the quantity demanded does not change significantly (or changes proportionally less) in response to a change in price.
    • Perfectly elastic demand implies an infinite change in quantity demanded for a tiny price change.
    • Perfectly inelastic demand implies no change in quantity demanded regardless of the price change.
  2. Analyze the nature of salt as a good.

    Salt is a basic necessity. It is consumed in small quantities, and its cost is a very small portion of a consumer's budget. Even if the price of salt increases or decreases, people will generally continue to buy roughly the same amount because it is essential and there are few close substitutes.

  3. Determine the elasticity of demand for salt.

    Because the quantity demanded for salt does not change much even with price fluctuations, its demand is considered inelastic. While it's not perfectly inelastic (as extreme price changes might have some minor effect), "inelastic" is the most accurate description among the given choices for a necessity like salt.

  4. Select the correct option.

    Based on the analysis, the demand for a good like salt is inelastic.

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