means that a price increase or decrease will not significantly alter demand for an item (145)
a situation in which a specific percentage change in price results in a smaller percentage change in quantity demanded; i.e., consumer demand for the product or service is not price-sensitive. Example: a three percent increase in price leads to a one percent decrease in the quantity demanded or a situation where a five percent decrease in price leads to a two percent increase in the quantity demanded. Differentiation driven by advertising is thought to make demand more inelastic. See elastic demand, skimming price policy, and penetration price policy.
When the percentage change in the quantity demanded is less than the percentage change in price. (p. 110)
A term used to describe a good with a price elasticity of demand between zero and minus one. For such a good, a price rise of per cent results in a proportionate fall of quantity demanded less than ; hence total sales revenue increases.
A market situation in which a change in price will bring about a smaller proportional change in the amount purchased. For example, consumers tend to buy and consume about the same amount of a product regardless of the change in price, with the result that less total expenditures are made for a large output than for a small one. An elastic demand has the opposite characteristics.
A term used when the percentage change in quantity demanded is smaller than the percentage change in price.
Demand which is not significantly affected by a price increase or decrease. p. 150
Demand is inelastic when the price elasticity of demand is between 0 and 1; the percentage change in the quantity demanded is less than the percentage change in its price. When demand is inelastic, there is a direct relationship between changes in the price of the good and the total revenue received by the firm.
The total demand for many business goods and services is inelastic—that is, not much affected by price changes. Demand is especially inelastic in the short run because producers cannot make quick changes in production methods. Demand is also inelastic for business goods that represent a small percentage of the item's total cost.
