inelastic demand

  

Definition

A situation in which the demand for a product does not increase or decrease correspondingly with a fall or rise in its price. From the supplier's viewpoint, this is a highly desirable situation because price and total revenue are directly related; an increase in price increases total revenue despite a fall in the quantity demanded. An example of a product with inelastic demand is gasoline.

Use inelastic demand in a sentence

  • Some products never really change their value and are considered an inelastic demand that you don't have to worry about.

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  • You may want to try putting some things with an inelastic demand on your shelves that will always be needed.

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  • My father, who was a rich business man, told me that it was an inelastic demand because the price raised.

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