Inelastic

In economics, 'inelastic' describes a situation where the quantity demanded or supplied of a good or service is not significantly affected by a change in its price. This means that consumers or producers will continue to buy or sell roughly the same amount, even if the price increases or decreases. The term can also be used more broadly to describe something rigid, unyielding, or resistant to change or bending. It signifies a lack of flexibility or responsiveness to external forces or stimuli.

Inelastic meaning with examples

• Demand for gasoline is often considered inelastic; even if prices rise, people need to drive to work and may not significantly cut back on their consumption. Thus, the increase in price barely changes the quantity demanded.
• Pharmaceutical companies often benefit from the inelastic demand for life-saving medications. Patients with critical illnesses must continue to purchase the drugs, regardless of price fluctuations, thereby offering a degree of control.
• The short-run supply of land is relatively inelastic. There is only a finite amount of land, so even if demand for its usage significantly increases, the overall supply cannot readily adapt or quickly change in response.
• An individual’s savings rate could become inelastic if they have fixed, essential expenses that consume most of their income. Any extra changes might get offset with a smaller budget.
• During an economic downturn, consumer spending on basic necessities like food and electricity tends to be inelastic, as people still must buy them to survive and maintain a stable existence.