Inelastic Demand:

By demand elasticity we refer to how responsive the demand is to a change in the product price. The demand for many industrial products tend to be relatively inelastic because a product responds very little to changes in its price. For example, if the price of Pembe is a small part of the flour brands, the change in it will be inelastic for the demand of the mills for grinding flour.

But if the demand for all other brands like Jogoo increases substantially, there is likely to be an eventually increased demand for the mills or machines for grinding the flour.

Some Marketing Factors Affecting Demand Elasticity

• If a change occurs throughout an entire industry, not in a single firm, the industry-wide cut in price will affect the price of the industrial product. For example, if the prices of all the flour brands like Pembe, Jogoo, etc. are decreased for a long time, there will be a decrease in the derived demand for the grinding mills or machines.
• Time is another factor. Over the long-run situations, the demand for any given industrial product will become elastic. If the prices of maize, millet, wimbi, etc, increase for a long time, the price of flour will go up and this will affect the demand elasticity of the grinding mills. The mills will be elastic in the long run.
• Finally, if the cost of an industrial product has a greater percentage of the total price of the finished good, then there is a greater elasticity of demand for this industrial product.