Tuesday, September 9, 2008

Inelastic
What does it Mean? An economic term used to describe the situation in which the supply and demand for a good are unaffected when the price of that good or service changes.

Investopedia Says... When a price change has no effect on the supply and demand of a good or service, it is considered perfectly inelastic. An example of perfectly inelastic demand would be a life saving drug that people will pay any price to obtain. Even if the price of the drug were to increase dramatically, the quantity demanded would remain the same.