If the price of a necessary medication increases by 20% and the quantity demanded decreases by only 5%, how would you describe the demand for this medication in terms of elasticity?

Demand elasticity measures how much the quantity demanded of a product changes when its price changes. In this case, the price of the medication increased by 20%, but the quantity demanded only decreased by 5%. This means that the change in quantity demanded is relatively small compared to the change in price. When the percentage change in quantity demanded is less than the percentage change in price, we say the demand is inelastic. For example, if a necessary medication costs $100 and then increases to $120, but only 95 people out of 100 continue to buy it, this shows that people still need it and are less sensitive to price changes.