A perfectly inelastic demand:
A) means people will quickly change the quantity they purchase when price changes.
B) means people will not respond to any change in price.
C) is demonstrated by a perfectly horizontal demand curve.
D) has an absolute value greater than 1.

Question

Quizplus · Accepted Answer

A perfectly inelastic demand means that the quantity demanded does not respond to any change in price, therefore people will not respond to any change in price. Option A is incorrect because it describes a perfectly elastic demand, where people will quickly change the quantity they purchase when the price changes. Option C is incorrect because a horizontal demand curve indicates a perfectly elastic demand. Option D is incorrect because the absolute value of elasticity cannot be greater than 1 for an inelastic demand.

A Perfectly Inelastic Demand