What characterizes an inelastic demand curve?

An inelastic demand curve is characterized by the quantity demanded changing little with price changes. This means that consumers will continue to purchase similar amounts of the product regardless of increases or decreases in price. Typically, this behavior is observed in goods that are considered necessities or lack close substitutes, as consumers prioritize acquiring these products even when prices fluctuate.

Inelastic demand is indicated by a steep demand curve, reflecting that the price elasticity of demand is less than one. Thus, even significant changes in price lead to relatively small changes in the quantity demanded. This is crucial for businesses and marketers, as it impacts pricing strategies and revenue forecasting.

Other options present characteristics that do not align with inelastic demand. For example, a horizontally aligned curve would suggest perfectly elastic demand, where any price change would lead to infinite changes in quantity demanded. Similarly, the notion of high sensitivity to price changes relates to elastic demand, where consumers respond significantly to price fluctuations. Lastly, the description of a steeply sloping curve might indicate a different type of demand but does not inherently define inelasticity without considering the degree of change in quantity demanded relative to price changes.