Inland Eastex Inc. manufactures toothpastes. Even when the company increased the price of its toothpastes last year, the sales did not drop. This is an example of _____.

a. elastic demand

b. joint demand

c. derived demand

d. inelastic demand

The correct answer is d. inelastic demand

Inelastic demand means that the consumers will buy toothpaste despite the increase in the selling price. One of the factors is due to a lack of substitutes or alternatives, no product can replace toothpaste in the current technology. Another factor is the necessity for its use. Consumers need to use toothpaste for hygienic purposes.