What is Inelastic Demand (0 < PED < 1) | UPSC Economy Notes

 Inelastic Demand (0 < PED < 1): ✅ Definition: "Inelastic demand" means people do not reduce their buying by much even if the price increases. It happens for essential goods — like curd, salt, petrol, etc. PED (Price Elasticity of Demand) measures how much quantity changes when the price changes. If PED is between 0 and 1 , demand is inelastic . ✅ What happens: Price goes up ➜ Quantity demanded goes down slightly . But because people still buy almost the same amount, the total revenue increases . Example: Petrol Price Increase 📌 Situation: Price of petrol increases from ₹100 to ₹110 (10% increase). Quantity demanded decreases from 5000 litres to 4850 litres (3% decrease). ✅ Let's calculate PED: PED = %  Change in Quantity %  Change in Price = 3 % 10 % = 0.3 \text{PED} = \frac{\%\ \text{Change in Quantity}}{\%\ \text{Change in Price}} = \frac{3\%}{10\%} = 0.3 🟩 Since 0 < PED < 1 , this is inelastic demand . 💰 Total Revenue: Before price rise: ₹100 × 5000 litres = ₹5,00,000 After price rise: ₹1…