The president of Tucker Motors says, 'Lowering the price won't sell a single additional Tucker car'. The president believes that the price elasticity of demand is:
A) perfectly elastic.
B) perfectly inelastic.
C) unitary elastic.
D) elastic.
Inelastic.

Question

Quizplus · Accepted Answer

The statement made by the president implies that no matter how much the price is lowered, there will not be an increase in demand for Tucker cars. This suggests that the demand for Tucker cars is not sensitive to changes in price, meaning that it is perfectly inelastic. This means that the quantity demanded remains the same regardless of changes in price.

The President of Tucker Motors Says, 'Lowering the Price Won't