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Question : The price elasticity of demand is perfectly inelastic when it is:

Option 1: -1

Option 2: 0

Option 3: 1

Option 4: Infinity.


Team Careers360 3rd Jan, 2024
Answer (1)
Team Careers360 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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