If the demand for a product is perfectly inelastic,then which of the following is most likely to be true?
A) The product is extremely important, or necessary, to those who buy it.
B) The product has many substitutes.
C) The demand curve for the good is horizontal.
D) The price elasticity of demand for that product is equal to one.

Question

Quizplus · Accepted Answer

Perfectly inelastic demand means that no matter the change in price, the quantity demanded remains constant. This typically occurs when the product is extremely important or necessary to those who buy it, and they are willing to pay any price for it. This is why choice A is the best answer. Choices B and C would not be true if the demand is perfectly inelastic. Choice D is incorrect because the price elasticity of demand is zero when demand is perfectly inelastic, not equal to one.

If the Demand for a Product Is Perfectly Inelastic,then Which