Which scenario exemplifies inelastic demand?

The scenario where consumers continue to buy nearly the same amount even when prices rise perfectly illustrates inelastic demand. Inelastic demand refers to a situation where the quantity demanded of a good or service changes very little in response to price changes. This is often characteristic of essential goods or services, where consumers perceive no viable substitutes and are willing to pay higher prices to maintain their consumption levels.

When consumers exhibit inelastic demand, it indicates that their purchasing behavior is not significantly affected by price increases, often due to the necessity of the product in question, such as medications, basic food items, or utilities. As a result, even when prices fluctuate, the total quantity demanded remains relatively stable, conveying the idea that consumers prioritize obtaining the good or service over managing expenses in that category.

Other scenarios presented do not embody inelastic demand. The first option refers to consumers dramatically reducing purchases with price increases, which describes elastic demand instead, where quantity demanded is highly responsive to price changes. The third choice regarding demand fluctuations due to income changes suggests a relationship with income elasticity rather than price elasticity. Lastly, the scenario where demand remains unaffected by consumer tastes does not capture the essence of consumer responsiveness to price changes, as tastes primarily influence demand rather than illustrating the price elasticity of