We should never assume that an inelastic demand curve is a perfectly inelastic demand curve because
A) there has never been evidence of a perfectly inelastic demand curve.
B) an inelastic demand curve may be perfectly inelastic at some times but not others.
C) perfectly inelastic demand curves are rare.
D) an inelastic demand curve may be elastic at high prices.

Question

Quizplus · Accepted Answer

Perfectly inelastic demand curves are extremely rare in the real world, and it is unlikely that an inelastic demand curve would be perfectly inelastic at all times and prices. Additionally, prices may rise high enough to make an initially inelastic demand curve become elastic. Therefore, it is best not to assume a demand curve is perfectly inelastic without clear evidence.

We Should Never Assume That an Inelastic Demand Curve Is