Practice Quiz

CLEP Microeconomics Exam Prep

Category - Microeconomics

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If the demand for something is perfectly inelastic, then what is the price elasticity of demand?
  1. -1
  2. 0
  3. 1
  4. 100
Explanation
Answer - B - If the demand for something is perfectly inelastic, then the price elasticity of demand is 0.

Key Takeaway: The price elasticity of demand shows how responsive (also known as elastic) the quantity of goods demanded is depending upon a change in the product’s price. If the demand for a good is perfectly elastic, the price elasticity of demand is infinity. If the demand for a good is perfectly inelastic, then the price elasticity of demand is 0.
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