Question : If a demand curve is VERTICAL, the following equation represents the own-price elasticity of demand for this good:
Option 1: The infinite
Option 2: Zero
Option 3: One
Option 4: None of the above
Answer (1)
13th Jan, 2024
Correct Answer:
Zero
Solution :
The same quantity of items is sought at every price level when the demand curve is vertical to the axis. This further implies that a change in price has no impact on the quantity that is required. As a result, the product is quantitatively perfectly inelastic and demand elasticity is zero.
Hence option b is the correct answer.
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