What happens to the demand for a product as it becomes more inelastic?

When the demand for a product becomes more inelastic, it indicates that consumers will continue to purchase the product despite changes in its price. This is often characteristic of necessities, which are products considered essential for day-to-day living, such as food, basic clothing, or medical care.

As these necessities have fewer substitutes and are integral to consumer well-being, people will prioritize their purchase even when prices rise. Thus, the demand remains relatively stable, as consumers cannot easily replace these items with alternatives, solidifying their status as necessities in the market.

In contrast, as demand becomes more inelastic, it suggests that consumers would not be as responsive to price changes, contrasting with products that are deemed luxuries or have many substitutes. Additionally, while some necessities may take a larger share of consumer income, this relationship is not a definitive element of inelasticity. The key factor is that necessities drive inelastic demand, as consumers will always require them regardless of pricing fluctuations.