When price of a good falls from Rs 30 to Rs 25, the consumer continues to purchase the same quantity of the good. What will be the price elasticity of demand for this good for the consumer?

Perfectly inelastic

The correct answer is Option (3) → Perfectly inelastic

• Perfectly Inelastic Demand: This occurs when the quantity demanded of a good remains unchanged regardless of any price change.

In this scenario:

• The price of the good decreased from Rs. 30 to Rs. 25.
• However, the consumer continued to purchase the same quantity of the good.

This indicates that the consumer's demand for the good is completely unresponsive to the price change, which is the characteristic of perfectly inelastic demand.

The other options are defined as follows:

• Unitary elastic: This occurs when the percentage change in quantity demanded is equal to the percentage change in price, resulting in no change in total revenue.
• Perfectly elastic: This means that consumers are willing to buy any quantity of the good at a certain price but none at a higher price. A small price increase would lead to the quantity demanded falling to zero.
• Elastic: This refers to a situation where the quantity demanded changes significantly with a change in price.