BUSINESS ADMINISTRATION
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Perfectly Elastic
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Perfectly Inelastic
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Relatively Elastic
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Relatively Inelastic
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Detailed explanation-1: -When the demand of a quantity does not change as a result of a change in the price of a commodity, the demand of that commodity is called a perfectly inelastic demand. In this case, the elasticity of demand is zero.
Detailed explanation-2: -If price elasticity is greater than 1, the good is elastic; if less than 1, it is inelastic. If a good’s price elasticity is 0 (no amount of price change produces a change in demand), it is perfectly inelastic.
Detailed explanation-3: -The price elasticity of demand in this case is therefore zero, and the demand curve is said to be perfectly inelastic.
Detailed explanation-4: -The Bottom Line Elasticity occurs when demand responds to changes in price or other factors. Inelasticity of demand means that demand remains constant even with changes in economic factors.
Detailed explanation-5: -Perfectly inelastic demand means that prices or quantities are fixed and are not affected by the other variable. Unitary demand occurs when a change in price causes a perfectly proportionate change in quantity demanded.