Final answer:
The demand for textbooks is price inelastic because they are considered a necessity, have few substitutes, and students are less sensitive to price changes. Limited availability of textbooks online also contributes to price inelasticity.
Step-by-step explanation:
The demand for textbooks is price inelastic because even if the price of textbooks increases, the quantity demanded does not decrease significantly. This is because textbooks are often considered a necessity for students and have few close substitutes. In addition, textbooks are generally purchased by students who are already enrolled in courses, so their demand is less sensitive to price changes compared to discretionary goods.
For example, if the price of textbooks increases by 10%, the quantity demanded may only decrease by a small percentage, such as 2% or 3%. This implies a price elasticity of demand less than 1, indicating inelastic demand.
Furthermore, the existence of limited availability of textbooks online can also contribute to the price inelasticity. Popular textbooks may quickly run out of stock online due to high student demand, making it difficult for students to find alternative sources at a lower price.