ECONOMICS
DEMAND
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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will still be in demand when there is an increase in price.
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will not be in demand when there is an increase in price.
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will be purchased in smaller quantities when there is an increase price.
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will be purchased in the same quantity at any price level.
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Detailed explanation-1: -When a good has an elasticity of zero it is called “perfectly” inelastic. This means that the supply and/or demand of the product will not change at all even as its price changes.
Detailed explanation-2: -E = 0: demand is perfectly inelastic, meaning that demand does not change at all when the price changes.
Detailed explanation-3: -The numerator of the formula given in Equation 5.2 for the price elasticity of demand (percentage change in quantity demanded) is zero. The price elasticity of demand in this case is therefore zero, and the demand curve is said to be perfectly inelastic.
Detailed explanation-4: -Normal goods whose income elasticity of demand is between zero and one are typically referred to as necessity goods, which are products and services that consumers will buy regardless of changes in their income levels. Examples of necessity goods and services include tobacco products, haircuts, water, and electricity.