Inelastic demand refers to a situation where the quantity demanded of a good or service changes very little when its price changes. This typically occurs with essential items, such as food, medicine, or gasoline, where consumers need these products regardless of price fluctuations. As a result, even if prices rise, people will continue to buy similar amounts. A key characteristic of inelastic demand is that the price elasticity of demand coefficient is less than one. This means that the percentage change in quantity demanded is smaller than the percentage change in price. Understanding inelastic demand helps businesses and policymakers make informed decisions about pricing and supply.