perfectly inelastic demand
- noun
- /ˈpɜrfɪktli ɪnɪˈlæstɪk dɪˈmænd/
- Specialized
:
demanda perfectamente inelástica
- In a market with perfectly inelastic demand, consumers will buy the same amount of a necessary good regardless of any price increases.
OK, So what what what would cause perfectly inelastic demand?
- OK, So what what what would cause perfectly inelastic demand?
Examples
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The price of insulin can rise dramatically, but people with diabetes face perfectly inelastic demand for it since they need it to survive.
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Given the assumption of perfectly inelastic demand, the dominant firm could theoretically charge an infinite price when it has monopoly power.
Academic text (2001) -
For addictive substances, a perfectly inelastic demand suggests that individuals will continue purchasing the same quantity even if prices soar.
Antonyms
- Specialized
People change how much they buy of something a lot when its price goes up or down
How Elastic
- Specialized
- Specialized
- Specialized
Surface Forms
Morphology
perfectly + inelastic + demand
The components are partly compositional: 'perfectly' is an intensifier, 'inelastic' is morphologically 'in-' + 'elastic' implying 'not responsive', and 'demand' is the quantity wanted, so learners get a general sense of 'completely not responsive quantity'. However, the precise meaning — that quantity demanded does not change regardless of price — depends on the economic technical notion of 'elasticity', so a B1 learner who only knows the surface words may not infer the full technical sense.
Etymology
The term perfectly inelastic demand comes from the image of something inelastic that cannot stretch: imagine a metal rod, not a rubber band, that stays the same when you pull it. So in economics it means the amount people buy 'does not change' no matter the price.
