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Refers to a product or service whose demand will not react strongly to a change in its price. For instance a large increase in price will result in a small reduction in quantity sold. It means the same as price inelastic, ie where a proportionate change in a product’s price leads to a proportionately smaller change in the quantity sold. Such goods tend to have high product differentiation meaning that consumers perceive them as having no acceptable substitutes. This may primarily be due to the effectiveness of their branding and advertising’. For the manufacturer, the advantage of a price inelastic product is that if its costs rise, it can pass them on to its customers with minimal effect on demand.

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