inelasticity

inelasticity definition - business

inelasticity

The lack of responsiveness of the quantity purchased of an item to changes in the item's price. If the quantity purchased changes proportionately less than the price, the demand is inelastic. For example, price increases for relatively inexpensive foods such as sugar and flour tend to produce small changes in the quantity demanded. Also called price inelasticity. Compare elasticity.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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