Which good is likely to have the least elastic demand?

• A. Insulin for diabetics.
• B. Toyota automobiles.
• C. Compact disc players.
• D. Toothpicks.

Answer: (A)

When we talk about elasticity, we’re looking at how much the quantity demanded responds to a price change. The least elastic demand occurs for goods that are essential and have few or no close substitutes—people must have them regardless of price in the short run.

Insulin for diabetics fits this perfectly. It’s a lifesaving hormone with no real substitute that can fully replace its function, and patients rely on it to survive. Because of that, even a meaningful price increase won’t lead people to dramatically cut back on insulin the way they would for nonessential items.

In contrast, owning a car is a normal, nonessential purchase with many alternatives—people can delay buying, choose different brands, or use other modes of transport if prices rise. Compact disc players have strong substitutes in streaming and digital formats, so demand is more responsive to price changes. Toothpicks are inexpensive and easily replaceable with alternatives like napkins or simply reduced use, making demand more responsive to price changes than for insulin.

So, the good with the least elastic demand is the life-sustaining insulin.