If demand for block-space is inelastic (insensitive to price) even a small (25%) increase in demand can cause 7000x in price.
Longterm we either need to hope for elastic demand or develop other strategies to protect apps and user from fee explosions.

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this is one strategy, the other strategy is to not sell all block space on a "spot market" but instead sell futures - so that a app can get predictable rates for a longer time horizion (like e.g. ~6 month)

are there good ways to make blockspace elastic (provide more of it when in demand)?

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yes, supply is basically completely inelastic.
I was trying to say: given a inelastic "base" demand + a slight extra increase == explosion of cost.

confused. did you not mean the supply is inelastic? In your example a small change in demand, results in a huge price increase --> price is sensitive to small changes in demand due to inelastic supply. Below you mention "spot market". What am I missing?