Inelastic (redirected from inelasticity)

inelastic

Of or relating to the demand for a good or service when quantity purchased varies little in response to price changes in the good or service. For example, the demand for medicines and medical services is generally inelastic because the quantity purchased by consumers is unresponsive to price changes. Producers of products and services facing inelastic demand curves have an easier time passing on price increases. Compare elastic.

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Inelastic

What Does Inelastic Mean?

An economic term used to describe the situation in which the supply and demand for a good or service are not affected when the price of that good or service changes.

Investopedia explains Inelastic

When a price change has no effect on the supply and demand of a good or service, that good or service is considered perfectly inelastic. An example of perfectly inelastic demand would be a lifesaving drug that people will pay any price to obtain. If the price of the drug increased dramatically, the quantity demanded would remain the same.

Related Terms:
•  Bear Market
•  Bull Market
•  Demand
•  Inflation
•  Inventory