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Why is the quantity demanded of habit-forming products price inelastic​

User Mezbah
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The quantity demanded of habit-forming products is often price inelastic due to the addictive nature of these products. When a consumer becomes addicted to a particular product, their demand for it becomes less responsive to changes in its price. In other words, even if the price of the product increases, the consumer may still continue to purchase it because of their strong attachment to the product and the difficulty they may have in quitting it.

This can be seen in products such as cigarettes, alcohol, and drugs, where even when the prices increase, the consumers who are addicted to these products may continue to purchase them because of their strong dependence. This makes the demand for these products less sensitive to changes in price, hence they are considered price inelastic.

In addition, these products may also have limited substitutes, which further limits the consumer's willingness to switch to other products even if the prices increase. This also contributes to the inelasticity of demand for these habit-forming products.

User Nominalista
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