If a good has inelastic demand, imposing a per-unit tax on that good will lead to a significant decrease in the quantity sold.

If a good has inelastic demand, it means that people will continue to buy it even if the price increases. When a government imposes a per-unit tax on that good, the price for consumers goes up because sellers pass on some or all of the tax cost. However, since demand is inelastic, the quantity sold does not decrease significantly; people still need or want the good despite the higher price. For example, consider insulin for diabetics; even if the price rises due to a tax, patients will still buy it because they need it to stay healthy. Therefore, the tax does not lead to a large drop in sales, as consumers are less sensitive to price changes for essential goods.