Short Answer 
Inelastic goods are products whose demand and supply remain stable despite price fluctuations, as they are essential items that consumers need regardless of price changes. Key characteristics include constant demand and supply regardless of price variations, with examples like water and food. The equilibrium price in the market is established when demand meets supply, but inelastic goods maintain steady demand even when prices rise.
Understanding Inelastic Goods
In economics, inelastic goods are products whose demand and supply are largely unaffected by changes in market prices. This implies that when prices fluctuate, the quantity demanded or supplied remains stable. Since these goods are necessities, consumers will typically purchase them regardless of price increases or decreases.
Characteristics of Inelastic Goods
These goods exhibit specific features that differentiate them from elastic goods. Key characteristics include:
- Demand remains constant even if prices rise or fall.
- Supply does not change in response to price changes.
- Examples include essential items like water and food.
The Role of Demand and Supply in Market Pricing
The intersection of demand and supply establishes the market price of goods. When buyers are willing to purchase at a specific price and sellers agree to supply at that price, an equilibrium price is reached. However, in the case of inelastic goods, consumers often have no choice but to buy these essentials even if prices increase, emphasizing the stability of demand in such situations.