If Mike says that “price is no object” when re-decorating his house, what is his likely demand curve for purchasing the items he is using to redecorate?
Explanation
Answer - D - If Mike says that “price is no object” when re-decorating his house, his likely demand curve for purchasing the items he is using to redecorate is both vertical and inelastic.
Key Takeaway: When there is no elasticity, consumers will buy a certain quantity of a good-no matter what the price. Mike says that “price is no object,” so he will purchase the goods he needs no matter what the price. Because of this, the demand curve is perfectly inelastic and, therefore, vertical.
