If demand is perfectly inelastic, then
A)the own price elasticity of demand is infinite in absolute value.
B)a small increase in price will lead to a situation where none of the good is purchased.
C)the demand curve is vertical.
D)neither will the demand curve be vertical, the own-price elasticity of demand be infinite in absolute value nor a small price increase lead to none of the good being purchased.

Question

Quizplus · Accepted Answer

If demand is perfectly inelastic, it means that changes in price have no effect on the quantity demanded. Therefore, the demand curve would be vertical, indicating that demand remains constant regardless of price changes. Choices A and B describe situations of perfectly elastic demand, and D is incorrect as it contradicts the definition of perfectly inelastic demand.

If Demand Is Perfectly Inelastic, Then