Perfectly Inelastic Demand

Perfectly inelastic demand occurs when consumers will buy the same amount of a product regardless of its price. This means that even if the price increases or decreases, the quantity demanded remains unchanged. An example might be life-saving medications that people need regardless of cost. In such cases, demand is perfectly inelastic, represented graphically as a vertical line on a price-quantity chart. This situation indicates that the product is essential, and consumers have no alternatives or are willing to buy the same amount no matter what the price is.