inelasticity

Inelasticity refers to how much the quantity demanded or supplied of a good changes when its price changes. If a product is inelastic, a price change has little effect on how much people buy or sell. For example, essential medicines or basic utilities tend to have inelastic demand because people need them regardless of price. Conversely, if a product is elastic, a small price change can lead to a significant change in quantity purchased or sold. Inelasticity helps businesses and policymakers understand market reactions and set prices accordingly.