Question : When demand is perfectly inelastic, a change in price will result in:
Option 1: No change in quantity demanded.
Option 2: A small change in quantity demanded.
Option 3: A large change in quantity demanded.
Option 4: An unpredictable change in quantity demanded.
Correct Answer: No change in quantity demanded.
Solution : The correct answer is (a) No change in quantity demanded.
In a situation of perfectly inelastic demand, the quantity demanded remains constant regardless of changes in price. This means that consumers are not responsive to price changes, and the quantity demanded does not change.
This scenario often occurs when there are no close substitutes available for a good, and consumers perceive the good as a necessity or have limited alternatives. Even if the price increases or decreases, the quantity demanded remains the same.
Therefore, when demand is perfectly inelastic, a change in price has no effect on the quantity demanded.
Related Questions
Trending Articles/News
