What is the effect of a 10 percent price increase on quantity demanded if elasticity is zero?
A)Quantity demanded does not change.
B)Quantity demanded drops by less than 10 percent.
C)Quantity demanded drops by 10 percent.
D)Quantity demanded drops by more than 10 percent.
E)Quantity demanded drops to 0.

Question

Quizplus · Accepted Answer

When the elasticity is zero, it means that the demand is perfectly inelastic. This implies that a change in price will not affect the quantity demanded, and hence, the quantity demanded will remain the same even after a 10 percent increase in price.

What Is the Effect of a 10 Percent Price Increase