Inelastic
Inelastic Meaning:
Elasticity refers to a relationship between two variables. A relationship that is inelastic is one where a change in one variable produces a significant change in the other, and an inelastic good or service is one where changes in its price don’t produce a significant change in demand for it.
Elasticity refers to a relationship between two variables. A relationship that is inelastic is one where a change in one variable produces a significant change in the other, and an inelastic good or service is one where changes in its price don’t produce a significant change in demand for it.
An example of an inelastic good is rice. As a staple foodstuff, changes in the price of rice don’t change the demand for it very much. Interestingly, while rice is an inelastic good in both Japan and China, it is more inelastic in Japan. That might be because there are more ‘substitutes’ for rice in China – that is, more dishes that contain a carbohydrate other than rice.