Inelastic Demand
A situation where the percentage change in quantity demanded is less than the percentage change in price (PED < 1 in abs...
Formula
PED = % change in quantity demanded ÷ % change in price
Real World
Insulin is a life-saving medication with very few substitutes; pharmaceutical companies like Novo Nordisk can raise prices significantly without proportionally reducing sales volume.
Exam Focus
When price rises and demand is inelastic, total revenue *increases* — always complete the revenue consequence or risk losing application marks.
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