Economics • Economic BasicsEasy
Which of the following describes the condition where the price elasticity of demand is zero, meaning the quantity demanded is completely unresponsive to price changes?
A. Perfectly Elastic Demand
B. Perfectly Inelastic Demand✓ Correct Answer
C. Unitary Elastic Demand
D. Relatively Elastic Demand
💡 Solution & Explanation
A perfectly inelastic demand curve signifies an absolute absence of consumer responsiveness to price changes, resulting in a numerical price elasticity coefficient of zero. Conversely, perfectly elastic demand implies infinite responsiveness where any price rise drops demand to zero. Essential life-saving medications often exhibit near-inelastic demand characteristics in real-world markets.
More Economics Economic Basics questions
- What is meant by the term 'Surplus Value' in classical economic theory?
- The concept of 'Consumer Surplus', defined as the monetary difference between what a consumer is willing to…
- What is meant by 'Fiscal Deficit' in government budgeting?
- Which of the following economic theorems states that under perfect competition, if property rights are…
- What does the 'Coase Theorem' suggest when transaction costs are negligible and property rights are clearly…