Question : Assertion: Perfectly inelastic demand implies that consumers are unresponsive to changes in price.
Reason: In perfectly inelastic demand, the quantity demanded remains the same regardless of price changes.
Option 1: Both the assertion and reason are correct and related.
Option 2: Both the assertion and reason are correct but not related.
Option 3: The assertion is correct, but the reason is incorrect.
Option 4: The assertion is incorrect, but the reason is correct.
Correct Answer: Both the assertion and reason are correct and related.
Solution : The correct answer is (A) Both the assertion and reason are correct and related.
The assertion states that perfectly inelastic demand implies that consumers are unresponsive to changes in price. This is correct because in perfectly inelastic demand, the quantity demanded remains constant regardless of changes in price. Consumers are willing to purchase the same quantity of the good regardless of price fluctuations, indicating a lack of responsiveness to price changes.
The reason states that in perfectly inelastic demand, the quantity demanded remains the same regardless of price changes. This is also correct because the defining characteristic of perfectly inelastic demand is that the quantity demanded does not change in response to price variations. The demand curve for a perfectly inelastic good is vertical, indicating a fixed quantity demanded at all price levels.
Therefore, both the assertion and reason are correct, and they are related as the reason supports and explains the concept mentioned in the assertion.
