Inelastic demand

Inelastic demand occurs when customers want approximately the same amount of a good or service, even when its price changes. A situation in which there is inelastic demand is excellent from the perspective of a supplier, since it can raise prices without any expectation of incurring a significant reduction in unit sales.

Critical supplies that a person or organization cannot do without tend to have inelastic demand. This situation also occurs when there are no clear alternatives to certain goods or services, as is the case with a monopoly.