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) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

Perfectly inelastic demand means that the quantity demanded does not change in response to a change in price. Therefore, the demand curve will be vertical, since price changes have no effect on quantity demanded. Option A is incorrect because infinite elasticity implies an infinitely responsive demand, whereas inelastic demand is characterized by low or zero responsiveness. Option B is also incorrect because if demand is perfectly inelastic, even a large increase in price would not reduce the quantity demanded to zero.

If Demand Is Perfectly Inelastic,then