Suppose demand can be written as Q = 5.The elasticity of demand is)
A) increasing as price rises.
B) decreasing as price rises.
C) constant regardless of prices and perfectly inelastic.
D) constant regardless of prices and unit elastic.

Question

Quizplus · Accepted Answer

The elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Since the demand equation given is a constant value (Q=5), any change in price will not lead to any change in quantity demanded. This means that the percentage change in quantity demanded will always be zero, regardless of the percentage change in price. Therefore, the elasticity of demand will also always be zero. This is a case of perfectly inelastic demand, which means that the demand is constant regardless of changes in price, and the elasticity is always zero (or infinite, depending on the formula used).

Suppose Demand Can Be Written as Q = 5