Yovanka has diabetes and she will pay any amount of money to buy insulin she needs to stay alive. Yovanka's price elasticity of demand for insulin is perfectly inelastic.
What is Price Elasticity of Demand?
Price elasticity of demand measures how much a product's consumption changes in response to price changes. Price elasticity is a tool used by economists to analyze how supply and demand for a product change in response to price changes.
If a good's price elasticity is infinite, it is perfectly elastic (if demand changes substantially even with minimal price change).
The good is elastic if price elasticity is more than 1, and inelastic if it is less than 1.
The elasticity of a product is impacted by the accessibility of a substitute. Demand won't change as the price increases if the product is necessary and there are no suitable alternatives, making it inelastic.
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