The lack of elasticity of commodities can be understood as commodities such as necessities. In the graphic study of demand elasticity, we can know that if the commodity lacks elasticity, the relationship between price (P) and total income (TR) changes in the same direction, that is, the price rises and the total income increases. In the same way, the price decreases, so does the total income. Therefore, if the provider wants to raise the price of goods, its total income will increase. However, if we arbitrarily raise prices and ignore market supply and demand, it may lead to the opposite result.

The formation process of healthy economy

As a discipline, health economics was formed and developed in 1950s and 1960s. Its historical background is:

(1) The rapid growth of health expenditure in developed countries. After the Second World War, due to the rapid improvement of medical research and technology, the modernization of diagnosis and treatment means and health facilities and equipment, the aging of the population, the sharp increase of chronic diseases and the increasing demand for medical care, the medical and health expenses have increased greatly.

For example, in the 1950 s, the expenditure on medical care in many European countries accounted for about 4% of GDP; By the end of 1970s, this proportion had risen to 8%. Judging from the growth rate, the proportion of health care expenditure to GDP in many countries increased by 1% in the 1950s. In 1960s, it increased by1.5%; It increased by 2% in the 1970s. High medical and health expenses are a heavy economic burden to the government, business owners, individual workers and families. Objectively, it is required to analyze the reasons for the rapid growth of health expenditure and seek ways to curb the growth of health expenditure.

② Socialization of health undertakings. After the Second World War, the scale of health services has become larger and larger, the technology and equipment have become more and more advanced, and the level of division of labor and specialization has become higher and higher. Medical and health undertakings have developed into a "health industry" department that occupies a lot of capital and labor, and occupies an important position in social and economic life. Therefore, studying the economic problems of the health sector has become an important topic in economic research. 1952, The Chronicle of the World Health Organization published an American paper "The Economic Aspects of Health", which is considered as the first work of health economics.