When demand for a good is __________, consumers will continue to purchase it even if the price increases significantly due to a tax, whereas if the demand is elastic, their purchases will drop considerably.

When demand for a good is inelastic, it means that consumers really need or want that good, so they will keep buying it even if the price goes up a lot because of a tax. For example, think about medicine that people need to stay healthy; even if the price rises, they will still buy it because they cannot do without it. On the other hand, if demand is elastic, like for luxury items or non-essential goods, a price increase will lead many consumers to buy less or stop buying altogether. This happens because people can easily choose not to buy these goods if they become too expensive. Understanding this helps businesses and governments see how taxes can affect sales and consumer behavior.