Explain how economists use the term price inelastic to describe the quantity demanded. Give some real-world examples of price elastic and price inelastic goods or services.

An inelastic good or service is one that has an elasticity lesser than 1. When the price of such goods and services is changed (both increase and decrease) by a certain percentage, the quantity demand changes by a lesser percentage. It is possible to determine the elasticity of a good or service empirically. It is necessary to calculate the elasticity at various prices as it can be different at different prices.

Some real-world examples of elastic demand are fast food items. Demand can fall quickly even with small changes in price due to the high level of competition. Chocolates, especially cheap chocolates, have an elastic demand due to high competition.

Products with inelastic demand are petrol and medicines. With both these products, there is a necessity to use them due to which consumers cannot really stop buying them even when prices rise.