ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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-2: -If Ped is between 0 and 1 (i.e. the percentage change in demand from A to B is smaller than the percentage change in price), then demand is inelastic. 3. If Ped = 1 (i.e. the percentage change in demand is exactly the same as the percentage change in price), then demand is unit elastic.

Detailed explanation-3: -A PED coefficient equal to zero indicates perfectly inelastic demand. This means that demand for a good does not change in response to price.

Detailed explanation-4: -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-5: -If elasticity = 0, then it is said to be ‘perfectly’ inelastic, meaning its demand will remain unchanged at any price. There are probably no real-world examples of perfectly inelastic goods.