We consider the deformation and breakup of a non-Newtonian slender drop in a Newtonian liquid, subject to an axisymmetric extensional flow, and the influence of inertia in the continuous phase. The non-Newtonian fluid inside the drop is described by the simple power-law model and the unsteady deformation of the drop is represented by a single partial differential equation. The steady-state problem is governed by four parameters: the capillary number; the viscosity ratio; the external Reynolds number; and the exponent characterizing the power-law model for the non-Newtonian drop. For Newtonian drops, as inertia increases, drop breakup is facilitated. However, for shear thinning drops, the influence of increasing inertia results first in preventing and then in facilitating drop breakup. Multiple stationary solutions were also found and a stability analysis has been performed in order to distinguish between stable and unstable stationary states.