Question : The price elasticity of demand is perfectly inelastic when it is:
Option 1: -1
Option 2: 0
Option 3: 1
Option 4: Infinity.
Answer (1)
25th Jan, 2024
Correct Answer: 0
Solution : The correct answer is (b) 0.
The price elasticity of demand is perfectly inelastic when it is option b) 0.
When the price elasticity of demand is 0, it indicates that the quantity demanded does not respond to changes in price. In other words, no matter how much the price changes, the quantity demanded remains constant. The demand curve in this case is vertical, representing a situation where consumers have no alternative options or substitutes, and they are willing to pay the same price regardless of changes in price.
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