In placing a tire order with Michelin, North Side Industrial Supply finds that the truck tires it is ordering have increased $37.50 in price since the last order. North Side proceeds with the order, confident that it can pass on the price increase to future customers. This is an example of business products having ____ demand.

Question

Quizplus · Accepted Answer

Inelastic demand refers to a situation in which a change in price leads to a relatively smaller change in demand. In this case, North Side Industrial Supply is confident that it can pass on the price increase to future customers, implying that the demand for truck tires is relatively inelastic, meaning that customers will continue to purchase the product, even with a price increase.

In Placing a Tire Order with Michelin, North Side Industrial