What will be the elasticity of demand for a good in which a change in price causes no change in the quantity demanded of the commodity?
Answer & explanation
Correct answer: option 2
The correct answer is Option 2: perfectly inelastic
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When a change in price causes no change in the quantity demanded, it means the quantity demanded remains constant regardless of price changes.
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This is the definition of perfectly inelastic demand, where:
Elasticity (Ed)=0 -
A common example could be life-saving medicines, where people will buy the same amount even if the price rises or falls.