Inelastic Demand : When a large change in price does not bring so much change in the demand, the demand is said to be inelastic. In this situation, percentage change in demand is lesser than percentage change in price. For example, a fall in price by 10 percent leads to rise in demand by only 5 percent. Such a situation will arise, when demand for commodity is very urgent (i.e. when its consumption cannot be postponed) or the expenditure on it is very small or its close substitutes are not available in the market. The numerical value of price elasticity here will be less than unity (i.e., ed<1 ). The slope of an inelastic demand curve is steep (inclined towards Y-axis) as shown in Fig.

In fig. a change in price of PP1 brings only a small change in quantity demanded (QQ1).