Perfectly inelastic demand

Indian Economy glossary

Also called: Zero elasticity of demand, Vertical demand curve · Topic: Consumer Behaviour, Demand and Elasticity · NCERT: Class 12, Ch 2 "Theory of Consumer Behaviour"

Meaning

Perfectly inelastic demand means the quantity demanded does not change at all when the price changes. The demand curve is a vertical line, and eD = 0 at every price. It is an extreme case used in theory. It helps show how demand behaves for goods that people feel they must buy in a fixed amount.

Example

A patient who needs a fixed daily dose of a life-saving medicine keeps buying the same number of tablets. They buy that amount whether the price is ₹50 or ₹80 a strip. Their demand is close to perfectly inelastic.

Don't confuse with

  • Inelastic demand: the quantity does fall when the price rises, just by a smaller percentage (0 < |eD| < 1). The curve slopes down steeply but is not vertical.
  • Perfectly elastic demand: the opposite extreme, with a horizontal curve and infinite elasticity.

Related concepts

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