Question

There is no change in ________ when Price Elasticity of Demand is inelastic.

• A. demand
• B. price
• C. supply
• D. all of the above

Hint:

Perfectly Inelastic = Vertical Demand Curve. Demand is constant like a 'pillar'.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
Price Elasticity of Demand (\( E_d \)) measures how much the quantity demanded changes when price changes.
Step 2: Detailed Explanation:
1. Inelastic Demand (\( E_d<1 \)): Demand is not very responsive to price.
2. Perfectly Inelastic Demand (\( E_d = 0 \)): This is a extreme case where, no matter how much the price changes, the quantity demanded remains exactly the same.
The phrase "no change" in the question refers to the Quantity Demanded (simply called 'demand' here). Even if the price changes significantly, the demand remains constant.
Step 3: Final Answer:
In a perfectly inelastic scenario, there is zero change in the quantity demanded.