The demand for salt is relatively price inelastic, while the demand fo

The demand for salt is relatively price inelastic, while the demand for pretzels is relatively price elastic. How can you best explain why?

What will be an ideal response?

ANSWER

Salt has few substitutes, and takes up a small percentage of the consumer’s budget, and thus demand is likely to be inelastic. While pretzels are also a small part of the budget, there are many substitutes available.