Which type of demand is unaffected by price changes?

The correct choice is inelastic demand, which is characterized by a situation where the quantity demanded of a good or service does not change significantly when there is a change in price. This means that consumers will continue to buy approximately the same amount of the product regardless of price fluctuations. Inelastic demand is typically observed in essential goods that people need for their daily lives, such as basic food items, utilities, and medical care.

When the price rises, consumers may not reduce their quantity demanded substantially because they perceive the product as a necessity. Similarly, a price drop will not lead to a substantial increase in quantity demanded. This concept is crucial in understanding consumer behavior and pricing strategies for essential goods.

Understanding inelastic demand helps businesses predict sales volume and revenue changes in response to pricing strategies. In contrast, elastic demand involves significant changes in demand in response to price changes, while unitary demand reflects a proportional change in quantity demanded with price changes. Variable demand does not specifically relate to the relationship between price and quantity demanded as directly as inelastic demand does.