Answer 1

The explanation of elastic demand can be defined as when price and some other factors depend
on the purchase of goods by the consumers that effects the quantity of buying in .product by the
consumers directly.When price have changed on some products due to some external effects,
consumers start responding on the product, quantity of buying goods is directly proportionsal to
the price.If the price goes down consumers buys a lot and if the prices goes high on products
consumers don't buy as per quantity.In such market conditions, consumers stop buying as much
and wait for them to return to normal.If a good or service has elastic demand , it means
consumers will doing lot of comparing among the similar products as per the different shops
when they have lots of similar choices.According to the law of demand it states that the quantity
purchased has an inverse relationship with price.Formula for the elastic demand is the
percentage change in quantity demanded divided by the percentage change in price.Elastic
demand is when the percentage change in the quantity demanded exceeds the percentage
change in price.That makes the ratio more than one.For example the quantity demanded rose
10% when the price fell 5%, the ratio is 0.10/0.05=2.Example of elastic demand- Two gold stores
sells identical ounces of gold.One sells it for $1800 an ounce while the other one sells it for
$1799 an ounce.With perfectly elastic demand, no one would buy the more expensive
gold.Instead, they all buy gold from the dealer who sells it for less.In real life situation of almost
perfect elasticity, many people, but not all of them, will choose the cheaper gold over the more
expensive one.Some might buy the more expensive gold because they likebetter shop owner
and they want quality shops.

Inelastic demand can be defined as when a change in price cause a smaller percentage change
in demand.It occurs where there is a price elasticity of demand of less than one.When the buyers
demand does not change as much as the price changes, when price increases by only 1% this
type of demand is said to be inelastic.This type if demand occurs with everyday household
products and services. When the price increases consumers will still purchase roughly the same
amount of the good or service as they did prior to the increase because their needs stay the
same.Formula of inelastic demand is Elasticity=Percentage change in Demand/Percentage
Change in Price.On these factors inelastic demand occurs like No substitutes, market
competion,goods those bought infrequently, on location, short run, small percentage of
income.Examples of inelastic demand such as Petrol-those with will need to buy petrol to get to
work,Salt-no close substitutes,Cigarettes-People who smoke willing to pay the higher
amount,Technology sectors like products of apple and microsoft, water.In such type of products if
price will be higher peoples will still going to purchase that product but in lower quantity or
consumers have to cuts on their personals expences on any other reasons.

Answer 2-

As per current situation business like resturants are in great trouble.If a resturant is going to open
at such situation with others competitor resturants who is old and popular in mid-price serving
dinners.In such situation newly resturants can employ some of business strategy like their
competitors haven't involve in their business like selling foods online instead of setting lots of
chairs. They can use the chairs for serving some of the costomers those who come out and eat
and they can supply foods online, and sets simple pricing which involves charging less as their
competitors charge on similar dishes and servies.These strategy of lower pricing and go serving
online can helps more the newly resturants more.After COVID when restrictions loosen the
resturants have made lots of costomers relations.