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Economics

Price Elasticity of Demand

Quick fact

Salt is one of the most inelastic goods—even a large price hike barely changes how much people buy, because it's cheap, essential, and has no close substitutes.

Why this is interesting

Why does a 10% price increase sometimes make people barely flinch (like for insulin), yet cause a huge drop in sales for other products (like soda)? The answer lies in a simple but powerful economic measure.