Question

Which of the following would likely be most price inelastic?

a. boats

b. Colgate toothpaste

c. a unique prescription medicine

d. Purina Dog Chow

Answer 1

Price inelastic good are those goods which are very less responsive to a price change. It means if there is a large increase in price then the quantity demanded will fall by very small amount.

Necessary goods generally have high inelastic demand, like medicine. If there is a large increase in price of medicine then the demand for medicine will fall by a small amount.

Thus, a unique prescription medicine has a most price inelastic among the other given goods in options.

So, the correct answer is an option (c).