Economics
Price Elasticity of Demand and Supply
Quick fact
When demand is inelastic, a price increase actually increases total revenue, even though fewer units are sold—which is why governments often tax goods like cigarettes and gasoline.
Why this is interesting
Ever wonder why a sudden price hike on your favorite snack makes you switch brands, but a steep rise in the price of insulin doesn't make you stop buying it? Why do some price changes dramatically alter buying behavior while others barely cause a ripple?