What defines an inelastic demand curve?

An inelastic demand curve is characterized by the fact that price changes lead to a smaller percentage change in quantity demanded. This means that consumers are relatively unresponsive to price changes; even if the price rises or falls significantly, the quantity they choose to buy does not change by much.

For instance, essential goods like medication or basic food items tend to have inelastic demand. People still need these items regardless of price fluctuations, which means that even if the price increases, the quantity demanded remains relatively stable. This behavior is reflected in the demand curve, which is steep and indicates that changes in price do not markedly influence the demand for the good.

Descriptors like "no effect on quantity demanded" would suggest perfectly inelastic demand, which is rare and generally only applicable to unique circumstances. Proportional changes imply that demand changes in a balanced manner relative to price shifts, indicating unitary elasticity rather than inelasticity. Overall, the essence of inelastic demand is the low sensitivity of quantity demanded in response to price changes.