What are some examples of products with inelastic demand?
1 Answer
Products with inelastic demand are demanded at a constant quantity for any given price.
Explanation:
Let's start by thinking of what this means about the product. If members of an economy demand Product X at a constant rate for every price, then those members of the economy probably need that product if they're willing to spend a lot of money for it. So what are some things that members of an economy might consider a necessity?
A real-world example is the drug Daraprim, which was created by Turing Pharmaceuticals to treat AIDS, and it treated AIDS quite well. Daraprim is notorious for its price rising from $13.50/tablet to $750/tablet overnight. But people with AIDS still had to buy the drug so that they could treat their disease. Other similar examples might be insulin for diabetics, chemotherapy for cancer patients, and drug infusions for people with ulcerative colitis.
Another example might be gasoline for cars. While we might slightly decrease the amount of gas used when the price rises, it's not going to be a significant decrease; we still require gasoline to get to work, school, et cetera.
Dependence might cause some goods to be inelastic as well. For example, smokers and alcoholics probably aren't going to simply quit purchasing cigarettes and alcohol because the price of either increased.
My final example would be a good produced by a monopoly. Let's say that Directv is the only TV company in an area. Come February when the Super Bowl comes out, people aren't going to simply not watch the Super Bowl, they will pay whatever Directv says they have to pay to see the Super Bowl.
