As we discussed in the earlier article, Starbucks primarily serves a demographic from which demand is relatively price inelastic, meaning that changes in price does not impact demand.

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There are plenty of reasons that American demand for Chinese goods is price inelastic including, most importantly, that there are limited substitutes for those goods.

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Since the demand for most drugs is inelastic with respect to price, the more you restrict supply, the greater the total revenue from sales and the more cash available to fuel the crime syndicates.

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Poppies cannot be entirely rooted out, and eradication efforts will only drive up the price of a product for which the demand among addicts is largely inelastic.

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The term inelastic simply refers to a good whose demand is relatively unresponsive to a change in price.

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The fundamental point is that, in the presence of inelastic supply curves, demand-side subsidies face a headwind of adverse price effects, while direct public provision gets a tail wind of favorable price effects.

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