Question

A perfectly inelastic demand curve indicates that

	a.	price has no effect on the quantity demanded.
	b.	for a given percent change in price, the quantity demanded rises by the same percentage.
	c.	the percent change in price is less than the percent change in quantity demanded.
	d.	a producer can sell as many units as desired at the market price but no units above the market price.

Answer 1

A perfectly inelastic demand is defined as an economic situation in which the demand of a product remains same irrespective of the change in the price of a product.

For eg:- Gasoline, the demand / quantity remains moreover the same even though when the price rises.

Therefore, the answer to the above question is a). i.e Price has no effect on the quantity demanded.

Options B) is wrong because the quantity demanded does not rises, it remains same.

Option C) is wrong as percent change in price has noeffect on quantity demanded.

Option D) is wrong, again quantity remains same.