The demand for a good is said to be elastic if the amount demanded increases much as the price is lowered, and decreases much as the price is raised. On the other hand the demand is relatively inelastic if an increase or decrease in the price affects very little the amount demanded. The demand for salt for table purposes is not affected appreciably by even considerable price changes and this demand may be said to be inelastic. The demand for salt for the purpose of destroying weeds is much more elastic, since the amount used for this purpose would depend greatly upon the price. The demand for sugar for the purpose of canning fruit also is an elastic demand, whereas the demand for it for use in tea and coffee would not be much affected by small changes in price.

Where there is a joint demand, that is, where the use of one good is dependent upon the use of another, as in the case of pen and ink, an increase or decrease in the price of one of the commodities is likely to have a smaller influence upon demand than where the demand is a simple one. Similarly, where there is a composite demand, that is, where the good is used for several different purposes, the elasticity of the demand is likely to be different from what it would be if the good were used for only one of the several purposes.