why the demand for cooking gas is not falling in spite of regular hike in the price of it? suggest one way to curtail its demand.
Hey Nisha,
Answer provided by Sami is correct. Besides the point mentioned by Sami, the demand for cooking gas is not falling in spite of regular hike in the price of it because cooking gas has no close substitutes and also government provides subsidy on it. The demand for cooking gas can be curtailed only by developing its substitutes. This is because the demand for a good that has more number of substitutes available will be relatively more elastic as a slight increase in the price will push the consumers to shift their demand away from the good to its substitutes, thereby reducing the demand for cooking gas.
Answer provided by Sami is correct. Besides the point mentioned by Sami, the demand for cooking gas is not falling in spite of regular hike in the price of it because cooking gas has no close substitutes and also government provides subsidy on it. The demand for cooking gas can be curtailed only by developing its substitutes. This is because the demand for a good that has more number of substitutes available will be relatively more elastic as a slight increase in the price will push the consumers to shift their demand away from the good to its substitutes, thereby reducing the demand for cooking gas.