Every month Olivier buys exactly 6 take-out pizzas even though the price may fluctuate significantly.Apparently,Olivier's price elasticity of demand for take-out pizza is
A)-1.
B)0.
C)1.
D)6.
E)infinity.

Question

Quizplus · Accepted Answer

Since Olivier is always buying the same quantity of pizzas regardless of the price fluctuations, his demand is completely inelastic. Elasticity of demand is measured as the percentage change in quantity demanded in response to a percentage change in price. If the percentage change in quantity demanded is lower than the percentage change in price, the demand is considered inelastic (and the elasticity value approaches 0). Therefore, choice B, 0, is the best answer.

Every Month Olivier Buys Exactly 6 Take-Out Pizzas Even Though