Inelastic Demand Examples

Inelastic Demand Definition and Examples

Inelastic Demand in economics can be defined as a minor change in the demand of the quantity or change in the behavior of consumer or perhaps no changes in quantity demanded goods whenever there is a change in the price of that product and further this can be determined by dividing the percentage change in quantity demanded by the percentage change in price. In this article, we discuss the practical examples of inelastic demand.

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Top 4 Examples of Inelastic Demand

The following are the examples of inelastic demand

Inelastic Demand – Example #1

Gasoline is one such kind of the product that has been observed by the market that even though the prices of the same rises, consumers buy the same amount of quantity and in the flip case when the prices of Gasoline drops consumers again don’t buy more in quantity and buy only the same quantity. You are required to discuss this scenario in terms of economics


Consumers behave in a different way for different types of products depending upon their needs, requirement, and taste. Goods, therefore, have been classified as normal goods, luxury goods, necessity goods in economics. Gasoline falls under necessity or inferior goods where consumers prefer to buy the same amount of quantity despite changes in the price of gasoline whether it rises or falls. This kind of situation in economics is referred to as Inelastic demand of elasticity where the price fluctuates but the quantity demand remains the same.

Inelastic Demand – Example #2

Consumers have a lot of preference in life for goods but however there are some inferior products that they don’t have any wish but a need. In one of the scenarios, company XYZ uses to make a unique product which is used in case of an emergency such as fire extinguisher, the company observed very unique behavior for their product.

When the prices of fire extinguisher were increased from $1550 to $1855, quantity demanded Quantity Demanded Quantity demanded is the quantity of a particular commodity at a particular price. It changes with change in price and does not rely on market morefrom 300 units to 295 units.

You are required to compute the demand elastic of this product and comment upon the same.


It is observed here that in case there is an increase in the price of fire extinguisher say by ($1655 – $1550) $305 then there is a change in demand for same that is a decrease in demand by just only 5 units (300 – 295) and to compute how elastic the demand we shall calculate percentage changeCalculate Percentage ChangePercentage change = (change in value/original value)*100. It is used to calculate the percentage change in the original value. This change could be upward or more which is $305/$1550 20% while for the quantity it is 5/300 which is approx. 2% and now we shall divide the change in quantity demanded by a change in price which shall be in percentage that is 2% / 20% which is 0.1 times.

Hence, this implies that whenever the price of the fire extinguisher increases by 1%, they would lose the demand for the same only by 0.1%. hence, this can be stated that the demand for cooking oil is Inelastic in nature and can be considered as an inferior good.

Inelastic Demand – Example #3

An analyst has gathered below details of product WMD from his last 5 years of history. It was noticed that was hardly any drop-in quantity demanded the goods,

PriceQuantity Demanded

You are required to comment upon the type of elastic demand discussed in the above example with a simple graph.


It is observed that as and when the prices of the product were increased the quantity demanded remained the same for the product WMD even though there were significant increases in the prices of the product. This can be proved that the demand for the product is inelastic in nature.

Inelastic Demand Examples Graph

As can be seen in the above figure the price fluctuates but the demand remains the same.

Inelastic Demand – Example #4

In a small town, there was the inauguration of a newly incorporated company that started supplying electricity to the consumers for the 1st time. They first charged the people $1 and people of the town were quite happy, and they got addicted to the power of same and started using many daily required electrical equipment and therefore the units that were demanded were 10,000 watts of electricity and when they raised the price to $5 the units demanded remained the same.

Based on the above information, you are required to comment upon the type of demand Inelastic that is discussed here.


It is observed that when there was a change in the price of the electricity from $5 to $1 which is $4 raise and in percentage it was a 400% rise in the price whereas the quantity demanded still remained, the same that is no changes in demand of electricity. This is was because they observed that people started adopting new electrical equipment which made their life easy and the same was dependent on electricity and hence, they never decrease the usage of electricity due to the rise in prices.

This is a clear case of inelastic demand whereby consumers prefer goods in the same quantity despite price changes and here electricity can be regarded as necessity goods.


Hence from all of the above examples, it can be concluded that demand Inelasticity is nothing but minor change or no changes at all in the demand whenever there is a change in the price of the product. Goods such necessity goods, basic goods or daily requirements goods or inferior goods typical are Inelastic in nature as without those goods the consumers feel uneasy and sometimes, they don’t even notice the price of the product as it is required by them and without it, their life will be uneasy.

Gasoline is the typical example of Inelastic demand in nature and its quantity changes in a lesser amount than compared to hike in its prices.

This has been a guide to Inelastic Demand Examples. Here we discuss its definition and the top 4 examples of inelastic demand with a detailed explanation. You can learn more about economics from the following articles –