Inelastic demand
Definition. Demand is described as price inelastic when the quantity demanded of a good responds less than proportionately to a change in its price, giving a price elasticity of demand of less than one in absolute value. A given percentage price change therefore causes a smaller percentage change in quantity demanded.
When demand is price inelastic, a rise in price increases total revenue while a fall in price reduces it, because the price effect outweighs the quantity effect.
This term belongs to Price Elasticity of Demand and Supply in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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