If demand is perfectly inelastic, what is the absolute value of the price elasticity of demand?
A)Zero
B)Less than one
C)More than one
D)Equal to the absolute value of the slope of the demand curve

Question

Quizplus · Accepted Answer

When demand is perfectly inelastic, it means that no matter what the price of the good or service is, the quantity demanded will remain the same. This implies that the percentage change in quantity demanded is zero in response to a change in price. Thus, the price elasticity of demand will also be zero, as it is calculated by dividing the percentage change in quantity demanded by the percentage change in price.

If Demand Is Perfectly Inelastic, What Is the Absolute Value